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ÁKK sells HUF 60 bln of floaters at auction

Debt

The Government Debt Management Agency (ÁKK) sold HUF 60 bln of two floating-rate bonds at an auction on Thursday, HUF 20 bln than planned.

Demand returned for the three-year papers and remained high for the five-year ones. Prices rose from the previous auction two weeks earlier.

ÁKK sold HUF 30 bln of 2017/C bonds, raising its original offer by HUF 10 bln after primary dealers bid for HUF 59.7 bln. It raised the offer for the 2019/B bonds also by HUF 10 bln to HUF 30 bln on bids of HUF 52.3 bln.

The average price of the three-year floaters rose to 98.79% from 98.67% at the previous auction on June 5. The average price of the five-year papers rose to 96.95% from 96.55% two weeks earlier.

Demand for the floaters rose significantly since the NBH announced late April a plan to attract banks' money from its two-week bills into government papers through replacing the two-week bills with non-tradable two-weeks deposits in August. The aim is to increase financing from forint, thus decreasing external vulnerability. ÁKK accommodated the move by adding the three-year papers to its regular choice of floaters and increasing the volume on offer. ÁKK has been auctioning the floaters bi-weekly instead of four-weekly since late March.

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