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Bigger offer of three-month T-bills 1.5 times oversubscribed at auction

A higher volume compared to the previous auctions of discount three-month T-bills was oversubscribed by a factor of 1.5 at an auction of by the Government Debt Management Agency (ÁKK) on Tuesday.

Yields were slightly under Friday's benchmark and rose a tad from a week earlier.

ÁKK sold the announced HUF 40bn of the bills due on February 1, 2012, after receiving bids for HUF 62.8bn. Bids for a lower, HUF 30bn offer reached HUF 69.9bn at the previous auction on October 18.

The debt manager raised the announced per-auction volume by HUF 10bn for the current auction after reducing it to HUF 30bn from HUF 50bn at the September 27 auction when it started offering three-month bills expiring in 2012.

Average yield at the auction was 6.05%, 2bp lower than the secondary market benchmark, calculated on bills expiring on March 7 next year, and 2bp higher than the average yield at the previous auction.

The yield range widened, to between 5.90% and 6.08% after narrowed to between 5.98% and 6.05% one week earlier.

The rate of oversubscription on Tuesday was similar to a liquidity bill auction held on Monday where ÁKK received HUF 87.7bn bids for the HUF 50bn discount T-bills offered. It sold the bills expiring on December 21 at an average yield of 6.03%. ÁKK held a liquidity bill auction, which are invited on a case-by-case basis, depending on the Treasury's liquidity needs, for the first time since the beginning of June.

Demand at the three-month discount T-bill auctions has dropped under earlier levels since the beginning of October, when the average three-month auction yield surpassed 6% for the first time since late 2009.

ÁKK has increased the gross three-month discount T-bill issues planned for October-December by HUF 100bn to HUF 490bn in its recently modified issue plan for the period. It also reduced Q4 expiries by HUF 10bn to HUF 572bn.