Monday 20 November 2017

Yields on €500m auction of short-term government debt expected to remain in negative territory

NTMA to auction €500m of Treasury Bills on Thursday

NTMA's Treasury Building
NTMA's Treasury Building Newsdesk Newsdesk

Yields on this week's €500m auction of short-term government debt are expected to remain in negative territory as investors continue to pay the state for the privilege of holding their money.

The National Treasury Management Agency announced in a statement today that it has scheduled an auction of one-year dated Treasury Bills for Thursday morning.

In March the NTMA's T-bill auction attracted rates of negative 0.43pc, the cheapest rate ever struck for Irish sovereign debt.

So far this year the NTMA has raised €9.3bn, if the recent inflation-covered bond deal is included, within its annual target range of €9-€13bn.

According to Ryan McGrath of Cantor Fitzgerald, the rates on this latest auction are likely to fall somewhere between the rates attracted by Belgium for its short-dated debt, which currently sits at close to negative .6pc and Spain and France, where yields on the same dated paper are close to negative .37pc and .36pc respectively.

Mr McGrath added the European Central Bank's ultra loose monetary policy, or quantitive easing, remains the "greatest influence" on T-Bill rates.

He said the NTMA is unlikely to launch another T-Bill auction after summer.

Read more: NMTA to borrow €1bn as bond repayment date looms

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