More than UAH 1.3 trillion in borrowings: how the domestic debt market works in times of war
4 August 2025 22:23
In January-July 2025, the government of Ukraine raised funds to the state budget from the placement of domestic government bonds (OVDPs) in the amount of UAH 249.74 billion, USD 863.8 million, and EUR 562.7 million. Such data was published by the Depository of the National Bank of Ukraine, "Komersant Ukrainian" reports.
At the same time, UAH 209.75 billion, USD 1,352.8 million, and EUR 665.7 million were allocated to repay obligations on domestic government securities.
In total, from the beginning of the full-scale invasion in February 2022 to the end of July 2025, the government held primary auctions to raise UAH 1.3 trillion, USD 9.2 billion, and EUR 3.03 billion. Repayments during this period amounted to UAH 884.56 billion, USD 9.97 billion, and EUR 2.83 billion. Thus, the net balance of borrowings remains positive, indicating that the state is actively involved in financing budget expenditures through the domestic debt market.
In July 2025, the maximum yields on domestic government bonds placed at auctions reached 17.80% p.a. in hryvnia, 4.25% in US dollars, and 3.25% in euros. This reflects current market conditions and demand for government instruments from investors, who, despite the high yields, take into account inflation and currency risks.
Thanks to the stable operation of the domestic debt market, the government retains the ability to finance the budget deficit without resorting to emission financing, which is critical for macrofinancial stability. In February of this year, the NBU expanded the technical capacity of the Ministry of Finance to manage public debt. In particular, the NBU introduced a new model for the placement of domestic government bonds, which involves the exchange of securities of one issue for other outstanding ones. This will increase the liquidity of the secondary market and optimize the debt structure.
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As of August 1, 2025, the volume of military government bonds held by Ukrainian citizens and businesses increased to UAH 108.0 billion in hryvnia (36.6% of all hryvnia military bonds), USD 1.59 billion (66.6% of dollar bonds) and EUR 262.7 million (40.8% of euro bonds). For comparison, a month earlier, the respective figures amounted to UAH 107.3 billion, USD 1.84 billion, and EUR 247.7 million, respectively. The total portfolio of individuals and legal entities in equivalent reached UAH 187.0 billion, which is 40% more than a year earlier.
The portfolio of military bonds held by non-residents amounted to UAH 8.52 billion, USD 15.4 million, and EUR 10.0 million as of the beginning of August. This indicates a moderate but stable presence of foreign investors in the military securities market, despite the war and geopolitical risks.
In July, the Ministry of Finance redeemed military bonds worth UAH 18.28 billion and USD 400 million. These repayments were made on time, which maintains investor confidence in government financial obligations.
The NBU regularly publishes updated statistics from the Depository on military domestic government bonds. Starting in March 2022, the publications were issued weekly, and starting in 2023, they were published monthly, as of the first day of each month. All data is available for review by the relevant tag on the NBU website.
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