NBU Expands the List of Benchmark Domestic Government Debt Securities that Banks Can Use to Meet Reserve Requirements, Effective 15 October

The National Bank of Ukraine is expanding the list of benchmark domestic government debt securities (benchmark bonds) that the banks have been allowed to use to partially meet the reserve requirements.
The domestic government debt securities identified as (ISIN) UA4000232896 and UA4000232912, which were first placed by the Ministry of Finance of Ukraine on 1 October 2024, will be added to the benchmark bonds list on 15 October 2024.
This measure will help step up activity at Ministry of Finance’s auctions to place domestic government debt securities, which is essential for ensuring that the state budget is financed without resorting to monetary financing.
As previously reported, the banks have since 11 October 2024 been able to use the securities on the benchmark bonds list to meet up to 60% of the reserve requirements.
The benchmark bonds list is made by the NBU based on the proposals of the Ministry of Finance of Ukraine.
From 15 October 2024, it will include fifteen issues of securities, namely: UA4000227094, UA4000227102, UA4000227185, UA4000227193, UA4000227201, UA4000227490, UA4000228043, UA4000228381, UA4000228811, UA4000229116, UA4000232177, UA4000232607, UA4000232615 and the new ones, UA4000232896 and UA4000232912.
The updated list of benchmark bonds the banks have been allowed to use to meet in part the reserve requirement was approved by NBU Board Decision No.
368 On Amendments to NBU Board Decision No.
752 dated 23 November 2017 dated 08 October 2024, to be enacted on 14 October 2024. 
For information: Reserve requirements are one of the instruments conventionally used by central banks.
This is how reserve requirements operate: a bank sets aside in its correspondent account with the central bank an amount of funds identified as a percentage of the bank’s liabilities (also known as reserve ratio) and marks a share of this percentage as having been covered by benchmark bonds. 
The amount is calculated as an average over the reserve period.
This allows the bank to smooth out potential ad-hoc fluctuations in liquidity and ensure the effective use of reserve requirements for their primary purpose, which is to absorb some of the banking system’s free liquidity.
Full data on reserve requirements and how the banks have been fulfilling them is available here.