On Tuesday, the Ministry of Finance sold nearly 1.12 billion kuna in treasury bills with a maturity of one year at an interest rate of just 0.09 percent, which is above the planned amount and still low.
In anticipation of the maturity of 864 million kuna in treasury bills, the Ministry offered treasury bills worth 850 million kuna for subscription. Financial institutions submitted bids totaling 1.116 billion kuna, all of which were accepted by the Ministry.
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The treasury bills were issued with a maturity of one year at an average interest rate of just 0.09 percent, the same as at the previous auction held on February 27.
Given the significant liquidity surplus in the financial system of approximately 27.5 billion kuna or 7.5 percent of GDP, as well as last year’s budget surplus which gives the Ministry of Finance a better negotiating position, such a low interest rate is not surprising.
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At the same time, analysts note that the supply-demand ratio is experiencing a continuous decline to the lowest level this year, which could indicate preparations in bank balance sheets for the upcoming refinancing of state road companies and/or a recovery in private sector lending.
With the maturity of 864 kuna in treasury bills, the balance of registered treasury bills increases by 252 million, to 19.76 billion kuna.
The next auction will be held on March 13 via the Bloomberg Auction System (BAS).
