Ukraine’s Ministry of Finance of Ukraine has nudged up yields on short-term government bonds, signalling a potential shift in borrowing conditions after a prolonged decline in rates, reported Ukraine Business News.

At this week’s domestic bond auction, the ministry raised UAH3.5bn ($90mn) for the state budget through the sale of hryvnia-denominated government securities, known as OVDPs.

One-year bonds with a maturity of around 1.2 years generated more than UAH1.4bn at an annual yield of 15.15%, while three-year securities attracted over UAH2.1bn with a yield of 16.15%.

The slight increase in yields on shorter-term debt marks a break from the downward trend seen since the start of the year, analysts said.

According to ICU, demand for one-year bonds fell below supply for the first time in 2026, with bids totalling less than UAH2bn. The maximum accepted rate remained at 15.15%, while the weighted average yield edged up by one basis point to 15.12%.

By contrast, demand for longer-term securities remained strong. Applications for three-year bonds reached around UAH7bn, significantly exceeding the volume offered. Despite this, the finance ministry was able to slightly reduce borrowing costs, with the maximum accepted yield falling by five basis points to 16.15%. The average yield on these bonds rose marginally by three basis points to 16.13%.

Since the beginning of 2026, Ukraine has raised UAH117.2bn through domestic bond sales, reflecting continued reliance on local borrowing to finance wartime expenditures. Since the war began in 2022, total funds raised via OVDPs have exceeded UAH2.1 trillion.

Despite the latest adjustment, yields remain lower than at the start of the year. Since January, returns on one-year bonds have declined by 123 basis points, while yields on three-year securities have dropped by 167 basis points.

Market participants say the uptick in short-term yields may reflect cautious investor sentiment, as well as the government’s need to maintain attractive returns to secure sufficient financing.

At the same time, robust demand for longer-dated bonds suggests continued confidence among domestic investors in Ukraine’s fiscal stability, even as the country navigates the financial pressures of the ongoing war.