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Yields jump at twelve-month T-bill auction

Yields rose sharply and the Government Debt Management Agency (AKK) cut its offer at an auction of twelve-month discount T-bills on Thursday.

AKK cuts its original offer by HUF 10bn to HUF 35bn after primary dealers submitted bids for just HUF 41.6bn.

Average yield at the auction was 9.96, 116bp over the secondary market benchmark and 205bp higher than the yield at the previous auction of the bills two weeks earlier. Yields were in a very wide range of 9.00% to 10.50%.

In a statement posted on its website after the auction, AKK said there was "broad demand" at the auction, considering the 53 bids, but it lowered the offer because of high yields which reflect the market's uncertainty over the past few days.

AKK said it considered it important to continue to regularly hold scheduled issues of debt, but at the same time to be flexible with regard to announced offers and accepted bids depending on investor demand.