According to the state budget approved on December 3, the Ministry of Finance has received authorization to replace government bonds (OVDPs) held by the National Bank of Ukraine with new instruments. The announcement was published by the Budget Committee of the Verkhovna Rada.
Article 19 of the state budget law allows the Ministry of Finance, upon a decision of the Cabinet of Ministers, to conduct a public debt operation by exchanging NBU-held bonds for new ones under terms agreed with the central bank.
However, the NBU is willing to exchange only part of its OVDP portfolio. As of January 1, 2026, the nominal value of OVDPs held by the NBU is projected at UAH 664.5 billion. Budget documents indicate that if the new bonds were to be redeemed evenly over 50 years, annual principal payments would amount to UAH 13.3 billion. The NBU rejected these terms as unfavorable, noting that such a structure could lead to losses or significantly reduce the bank’s income — and therefore diminish the amount of profit transferred to the state budget.
Current projections show that annual redemptions of the existing NBU portfolio in 2026–2032 will range from UAH 11 billion to UAH 12.3 billion, making a full exchange economically impractical in the next five years.
At the same time, the NBU and the Ministry of Finance are considering a more limited operation: exchanging inflation-indexed OVDPs issued in 2017, with a nominal value of UAH 145.2 billion, for new bonds with a coupon structure that would ensure the exchange is loss-neutral for the NBU while generating savings for the Ministry of Finance.
These “inflation-linked” OVDPs entered the NBU’s portfolio during a previous debt reprofiling in 2017. At that time, the government exchanged UAH 219.6 billion of bonds maturing between 2017 and 2030 for new securities maturing between 2025 and 2047. As part of the operation, the coupon rate on the largest portion of the new instruments (UAH 145 billion, or two-thirds of the total) was tied to inflation — a mechanism that increases debt-servicing costs when inflation rises.
