Investors again reject Ukraine's hryvnia bonds

Investors snubbed sales of local Ukrainian bonds for a second time this year, offering no bids on Thursday at a regular weekly auction, the finance ministry said. The ministry was offering one-, three-, five- and seven-year hryvnia bonds for sale. Investors similarly ignored a bond auction on May 17, though dollar-denominated one-, two- and three-year bonds for $535 million found buyers at a May 29 auction.
Ukrainian analysts say local banks and investors are losing interest in buying government bonds due to a shortage of free liquidity and uncertainty about the hryvnia. The hryvnia, which is pegged at around 8 per dollar, has come under pressure since last autumn as Ukraine's current account deficit widened. In 2011 the central bank lost $7 billion in reserves as it intervened to support the peg.