ÁKK invites first liquidity bill auction since January
The Government Debt Management Agency (ÁKK) will offer HUF 20 bln short-term "liquidity" T-bills on November 2, inviting the first such auction since January, the invitation for the Monday auction shows.
The (usually) six-week liquidity discount T-bills are designed to manage the central governmentʼs short-term liquidity needs, and, accordingly, are auctioned on a case-by-case basis.
The bills expire on December 30, after the big year-end tax payment deadlines but before year-end thus providing 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.
In a usual late-autumn pattern, the debt manager has cut back its three-month and, to a lesser degree, its twelve-month bill auction offers since the middle of September. Demand for the papers fell, however, even more sharply, and the last four weeks saw several undersubscribed bill auction after the National Bank of Hungary (MNB) lengthened the term of its key sterilization instrument, replacing its former two-week deposits with three-month deposits late September. The new three-month central bank deposits pay the central bank base rate, 1.35% at present. The base rate is well over the three-month average auction yield which bottomed out at 0.38% annually in the middle of September and rose to 0.72% at the last auction on Tuesday.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.