The central bank said yesterday it would auction NT$100 billion (US$3.3 billion) in 364-day certificates of deposit (CDs) next week as part of its efforts to absorb extra liquidity in the money market.
The central bank will conduct the auction on Tuesday and start issuing the securities in the next day, it said in an e-mailed statement.
Banks, bills finance companies, investment trust firms, credit co-operatives and Taiwan Postal Co (臺灣郵政) are entitled to participate in the auction, the statement said.
The monetary policymaker would employ a "multiple-rate auction," which means that the alloted yield or coupon rate of the securities will be determined by the rate offered in each individual bid, it said.
The central bank normally sells 364-day CDs every month to prevent excess liquidity from dragging down market rates. It also conducts sales of 30-day, 91-day and 182-day CDs and negotiable CDs daily from Monday to Friday in a bid to help control short-term liquidity.
Yesterday, the bank sold NT$73 billion in 30-day CDs at a fixed rate of 2.06 percent, NT$40.7 billion in 91-day CDs at a rate of 2.15 percent and NT$36.3 billion in 182-day CDs issued at a rate of 2.25 percent, the bank said.
The offer rates for the securities with various maturities are higher from 2.04 percent (for 30-day CDs), 2.13 percent (for 91-day CDs) and 2.23 percent (182-day CDs) in the previous session, respectively, after the central bank raised its benchmark interest rates last week for the 15th consecutive quarters.
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