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Demand drops, yields slightly above benchmark at three-month T-bill auction

The Government Debt Management Agency (AKK) sold the announced amount of three-month discount T-bills on twofold subscription at an auction on Tuesday. Yields fell sharply from a week earlier but were slightly over Monday’s respective benchmark.

AKK sold HUF 45bn of the bills, the announced amount. Primary dealers offered to buy HUF 89.5bn of the bills expiring on May 2.

Demand fell sharply from the unusually high level of HUF 173.4bn one week earlier when AKK raised its sales by HUF 10bn to HUF 55bn at falling yields. The auction was the first one since the end of December with bids below HUF 100bn.

Average yield was 7.65%, 2bp over the secondary market benchmark, calculated on the same bill series, and 19bp under the yield at the previous auction of the bills one week earlier.

Yields ranged between 7.45% and 7.73%, as the range dropped and narrowed from between 7.50% and 7.90%% at the previous auction.