NBU updates list of benchmark government bonds to be included in coverage of required reserves from April 12

The National Bank is updating the list of benchmark government bonds, through which banks can cover part of the volume of required reserves.

This is stated in the NBU's message, the Ukrainian News agency reports.

Thus, from April 12, 2025:

- the government bond with the identification number (ISIN) UA4000227185 will be excluded from the list of benchmark government bonds due to its scheduled repayment on April 2, 2025 in full;

- instead, the government bond with ISIN UA4000234934 will be added to the list of benchmark government bonds, the first placement of which was carried out by the Ministry of Finance of Ukraine on April 1, 2025.

This decision is intended to support the activity of banks at the auctions of the Ministry of Finance of Ukraine for the placement of government bonds, which is important for ensuring financing of the state budget exclusively on a non-issue basis.

Banks are able to include a certain list of benchmark government bonds in covering up to 60% of the volume of required reserves.

The relevant list is determined by the National Bank, taking into account the proposals of the Ministry of Finance of Ukraine.

From April 12, 2025, it will contain 17 issues of securities, namely: UA4000227102, UA4000227193, UA4000227201, UA4000227490, UA4000228043, UA4000228381, UA4000228811 UA4000229116, UA4000232177, UA4000232607, UA4000232615, UA4000232896, UA4000232912, UA4000233613, UA4000234140, UA4000234553 and the new UA4000234934.

The update of the list of benchmark-OVDPs for banks to cover part of the required reserves was approved by the decision of the Board of the National Bank of Ukraine dated April 11, 2025 No. 129-rsh "On Amendments to the Decision of the Board of the National Bank of Ukraine dated November 23, 2017 No. 752-rsh", which comes into force on April 12, 2025.

As the Ukrainian News agency earlier reported, required reserves are one of the traditional instruments of central banks.

Its content is as follows: a bank is obliged to reserve funds on its correspondent account with the central bank in an amount that is determined as a certain percentage of its liabilities (reserve ratio) and takes into account the share of required reserves that the bank covers at the expense of benchmark-OVDPs.

This amount must be formed on average over the reservation period.

This makes it possible to smooth out possible conjunctural (unpredictable) fluctuations in liquidity, while ensuring the effective use of the instrument itself for its intended purpose – limiting part of the free liquidity of the banking system.