Lithuanian T-bills hit all-time low

  • 2004-03-18
  • Baltic News Service
VILNIUS - The average yield on six-month treasury bills hit an all-time low March 15, reflecting the reduced borrowing needs of the government following a recent Eurobond placement, as well as an excess supply of litas on the market, analysts said.

The average yield on six-month T-bills fell by 0.396 percentage points to 1.933 percent, with 25 million litas' (7.25 million euros') worth of securities changing hands at the auction.
Noting that the yield on Germany's six-month T-bills currently stands at around 2.02 percent, Zilvinas Bucys of the capital market division at Vilniaus Bankas' treasury and financial markets department said that investing in riskier Lithuanian securities is not reasonable.
"This could be attributable to a large oversupply of money on the market, as well as to investors' expectations that the European Central Bank will not raise interest rates," he said.
Lukas Tursa, director of the treasury department at the Finance Ministry, said the decline in yields was due to the state's reduced borrowing needs as a result of the successful placement of Lithuania's 600 million euro Eurobond in late February, as well as to the continuing demand for short-term government securities.
"That is why the interest rates are similar to those in Germany," he said.
At the March 15 auction, the lowest yield for bids received stood at 1.89 percent, while the highest yield accepted acquired a yield of 1.96 percent
Some 26 bids worth 88.76 million litas in total were placed for the auction. Competitive bids worth 16.54 million litas and noncompetitive bids worth 8.46 million litas were accepted. This issue matures on Sept. 16, 2004.