Treasury bills’ interests in the primary market are growing even during June. At Tuesday’s auction, 12-month maturity bills recorded a weighted average interest rate of 1.68%, from 1.46% at the previous auction.
After several months of falling interest rates to minimal historical values, May marked a turning point. Increasing interest rate adjustment was expected, given that the decline had reached very low and possibly unforeseen levels. Especially after the Eurobond issue, in October last year, the domestic financial market was even more liquid than usual. This increased competition among investors to buy T-Bills and T-Bonds, in the absence of other financial investment alternatives in local currency.
The interest rates on government debt papers went down unrecorded, but this drop naturally reached a bottom line and interest rates are beginning to move to the most reasonable levels. On the other hand, even the financial market demand to buy bonds has been somewhat reduced in recent auctions. At yesterday’s auction, the value of claims was only slightly higher than the amount of bonds promulgated for sale by the Ministry of Finance.
This indicates that the government securities market may have partially absorbed the excess liquidity created. Despite the interest rates being in a growing adjustment cycle, experts do not expect this growth to be large.