Weak demand at Tuesday’s three-month discount T-bill auction is obviously the consequence of to the recent exchange rate developments and related expectations, László András Borbély, deputy head of Hungary’s Government Debt Management Agency (AKK), told Econews.
The uncertainty on the government securities market is due to the situation on the foreign-exchange market, Borbély said.
AKK will make a decision on Thursday whether to invite a bond auction next week, Borbély said, adding that “the developments on the government securities market will to a large part depend on the exchange rate” and on “what measures will or will not be taken to tackle the exchange rate”.
The forint weakened sharply in the past few days and surpassed 300 to the euro Tuesday noon.
Earlier in the day, Borbély told Reuters that, depending on market developments, AKK may invite a bond auction in the middle of the month. The auction would be the first one since AKK suspended bond auctions in early October.
Auction demand for the three-month discount T-bills fell below offer on Tuesday for the first time since early October and the maximum accepted yield rose to 9.50% on Tuesday. The average yield still fell, however, suggesting that the drop in demand took even some primary dealers by surprise. (MTI-Econews)