ÁKK cuts liquidity bill sale on moderate oversubscription

Debt

An auction of short-term "liquidity" T-bills was only moderately oversubscribed on Monday, and the Government Debt Management Agency (ÁKK) sold fewer bills than it originally offered, Hungarian news agency MTI reported today. The (usually) six-week liquidity T-bills are designed to manage the central government's short-term liquidity needs, and, accordingly, are usually auctioned on a case-by-case basis.

ÁKK sold HUF 45 bln of the bills at the auction, HUF 5 bln less than the original offer after receiving bids for HUF 60.7 bln.

Average auction yield was 1.82%, and accepted yields varied between 1.70% and 1.92%.

The average yield of the closest, 3-month discount T-bills was 1.34% at the last auction on October 21, and the 3-month secondary market benchmark yield was 1.53% at the last trading day on October 22.

The bills expire on December 23, after the big year-end tax payment deadlines.

Thus the issue provides liquidity without raising year-end government debt. ÁKK tends to keep year-end issues low and repayments high to keep the year-end gross state debt ratio on a falling trend.

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