Ukraine recently sold 270 million USD worth of short-term bonds, adding much-needed liquidity to the nation’s coffers. The big deal here is that these short-term bonds were placed at a price of just 5.52% annualised return for the three-month bonds, and 5.89% for the six-month version. If we go back just a few years, international investors wouldn’t touch Ukrainian debt unless they were assured of double-digit returns. This is a sure sign of confidence in the economy for those who see the glass as half full!
Of course, for the realists, this is but a sticking plaster being placed on a deep wound. While the low coupon percentage certainly is meaningful, Ukraine has a much bigger hole to fill in treasury finances, and the only way to get that hole filled is to get the IMF aid programme back on track, whatever difficult choices that may entail. In the short term, a gap has been plugged, but in the medium term, Ukraine needs billions, not short-term borrowing in the millions.