Market Information Wednesday 15 June 2022

The head of parliament’s financial committee states that Ukraine’s budget revenues cover less than half of expenditures following Russia’s invasion, and the government will have to cut budget spending sharply if no more external financial assistance will be provided. The government has collected 101 billion hryvnias (USD 3.42 billion) in taxes in May, but has spent 250 billion hryvnias financing the army and supporting people who had been forced to leave their homes or whose homes have been destroyed.

The Russian rouble hit three-week highs against the euro and U.S. dollar on Tuesday, continuing to climb despite recent interest rate cuts and a looming economic crisis. The Russian currency has been supported by capital controls that Russia imposed in late February after sending tens of thousands of troops into Ukraine, though the recent strength has triggered policymakers to rethink their economic response to Western sanctions.

The Turkish central bank’s new requirement for banks to hold bonds against foreign exchange deposits has pushed yields sharply lower and, according to analysts, positioned the state as the dominant player in the debt market. The move was one of several measures designed to utilise banks and bond markets to help cool rampant inflation and stabilise a sliding currency. It also reinforced President Tayyip Erdogan’s unorthodox commitment to low interest rates.

The 6M Euribor increased with 3 basis points to 0.11% compared to previous business day. The 10Y Swap increased with 25 basis points to 2.62% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.