Fixed Income Weekly: February 21 - February 27, 2022

On 24 February 2022, the National Bank of the Republic of Kazakhstan set the base rate at 13.5%, hiking it by 325 bps due to severe worsening of the geopolitical stance. As of 25 February, USDKZT weakened to 465.99, losing 8.7% of its value since the week before. Last week NBK mitigated FX fluctuations by foreign currency interventions in the amount of $176 mln, including $138 mln on 24 February alone.
Bonds of the Ministry of Finance of the Republic of Kazakhstan. Last week, the Ministry of Finance of the Republic of Kazakhstan placed two bond issues for a total of KZT56.7 bln (last week there were three bond issues for a total of KZT57.3 bln). The 15-year bonds evidenced the strongest demand of 98% vs supply and the bonds’ yield amounted to 11.10%. 83.7% of the placement was purchased by institutional investors, and 16.3% - by other legal entities. Yield on 7-year bonds amounted to 10.97% (November 2021 issue - KZT3.0 bln with a yield of 10.75%).
Notes of the National Bank of the Republic of Kazakhstan. On 21 February 2022, an auction for 29-day notes placement was held in the amount of KZT180.7 bln with a yield of 10.232% (previous week – yield of 10.2266% on a placement in the amount of KZT270.0 bln).
The weekly net borrowing balance of the Ministry of Finance and the National Bank of the Republic of Kazakhstan in the government securities market amounted to minus KZT113.4 bln, with the weekly net borrowing balance of the National Bank in the amount of minus KZT166.7 bln.
On 21 February 2022, Asian Development Bank placed 9-year bonds in the amount of KZT14.0 bln with a yield of 11.0%. Demand for social securities made 140% of the supply. 35.7% of the issue’s total was purchased by institutional investors, and 64.3% - by other legal entities.