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Ukrainians have purchased $25 billion in domestic government bonds since start of full-scale war

by Martin Fornusek May 22, 2024 1:54 PM 2 min read
The building of the National Bank of Ukraine in Kyiv. (Panama7/ Getty Images)
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Ukrainian citizens, businesses, and banks have purchased over Hr 1 trillion ($25 billion) of domestic government bonds on market terms since the outbreak of the full-scale war, the Finance Ministry said on May 22.

These funds have played a major role in sustaining Ukraine's financial stability throughout the all-out war, the ministry said in a press release.

The ongoing invasion has put a heavy strain on Ukraine's economy and budgetary needs, forcing the government to search for additional sources of funds at home and abroad.

"Thanks to the funds raised from domestic government bonds, we were able to finance more than 200 days of our security and defense, which is equivalent to 15% of Ukraine's GDP (gross domestic product) in 2023," Finance Minister Serhii Marchenko said.

"Investments in government bonds have become the second largest source of financing for the State Budget after international aid," he added. Ukraine received $42.5 billion in external financing last year.

A government bond is a form of bond issued by the state with a commitment to pay periodic interest called coupon payment and to repay the face value on the maturity date.

Domestic government bonds are currently in turnover for more than Hr 1.6 billion ($40 billion), with commercial banks representing 42.2% of shares, Ukraine's National Bank 41.5%, legal entities 10%, individuals 3.8%, non-residents 2.4%, and territorial communities 0.1%, the ministry said.

The volume of investments by individuals has increased 600 times since 2016, and more than 2.4 times since the outbreak of the full-scale war on Feb. 24, 2022.

Between January 2022 and March 2024, coupon income of Hr 31.5 billion ($790 million) was paid to Ukrainian individuals and entities and Hr 19 billion ($480 million) to foreign ones, according to the statement.

Monthly chart: Ukraine struggles to cover budget needs for 2 months in a row as foreign financing dwindles
The following is a chart based off of data originally published in the Kyiv-based Center of Economic Strategy’s “Ukraine War Economy Tracker.” The Kyiv Independent is republishing it with permission. Ukraine’s budget struggles with low amounts of foreign aid in 2024 Ukraine’s state budget fin…
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