Daily Insight-Promise on natural gas agreement emerges; gov\'t bond auction preview; bank liquidity rises

Banks\' correspondent accounts with the NBU rose last Friday by UAH3.83bn, to UAH21.27bn. As a result, broader banking sector liquidity rose by UAH3.88bn, to UAH24.19, the highest level seen during last two months. Debt repayments scheduled for the next 30 days remains steady, at UAH2.79bn, but the total volume of CDs rose by UAH46.0m, to UAH138m, after the NBU last Thursday sold new CDs with 43-day tenors, the first time since 13 October, 2011, and the third time since the one month break. The KyivPrime rates diverged last Friday: (1) the KyivPrime ON rate fell by 590bp, to 4.8%; but (2) the KyivPrime 1M rate remained steady, at 25.9%. These movements could be the result of the new reserves requirements which took effect last week, which pulled up the banks\' accounts with the NBU. At the same time, the 1m rate remains steady, likely because of the expectation for a deficit in funds at the beginning of the new year.