“The Ministry of Finance does not see any risks to ensure the amount of borrowing on the domestic market provided for in the 2025 state budget.”, — write: www.ukrinform.ua
According to him, there are currently no signals indicating a possible worsening of the situation on the OVDP market. At the same time, the government official admitted that the country actually reached the threshold value of the volume of domestic borrowing, after which such loans become ineffective and have an extremely negative impact on debt servicing.
“Ukraine has approached the borrowing threshold, when each additional borrowed hryvnia does not have any fiscal effect. There are certain limits. You can’t borrow endlessly. Instead, the issue of debt service is important. If we take into account its cost, the amount we pay for repayment of loans, it will become clear that it makes no sense to continue to borrow “infinitely” at 15-16%,” Marchenko emphasized.
Therefore, the volume of loans due to the issuance of OVDP next year will not increase. But there is no reason to talk about the risks of reducing domestic borrowing either. In particular, the Ministry of Finance does not expect a drop in demand for OVDP from banks after the planned increase in taxation of their profits. After all, banking institutions mostly invest clients’ money in securities.
Interest in Ukrainian securities on the part of legal entities and individuals remains.
“We have opportunities for borrowing. During the last auction, 19 billion hryvnias were drawn into the budget. And there is currently no critical need to borrow at any cost. We have enough liquidity,” Marchenko assured.
Read also: During the 1000 days of the war, Ukrainians tripled their investments in OVDP – Ministry of Finance As reported by Ukrinform, on November 26, 2024, the Ministry of Finance attracted UAH 19.150 billion to the state budget at the auction for the placement of domestic state loan bonds. In general, since the beginning of the full-scale invasion of the Russian Federation in Ukraine, the investments of individuals in government bonds have increased from UAH 25.5 billion to UAH 72.61 billion.