The central bank yesterday sold NT$25 billion (US$81 million) in 364-day treasury bills at a yield of 0.66 percent in an auction, indicating abundant liquidity in the market.
This compared with an all-time low yield on 364-day treasury bills of 0.195 percent on April 10 last year, when the auction attracted 6.64 times the number of bills on offer, the central bank’s data showed.
The central bank, which represented the Ministry of Finance in the treasury bills sale, said the auctions of the securities, which will mature on Oct. 21 next year, had attracted 3.96 times the amount of notes on offer. That compared with 2.9 times on the sale of 182-day bonds on Sept 29.
BOOST THE COFFERS
The sale of treasury bills will help boost the government’s coffers and will help meet short-term capital needs and repay debt, the ministry said.
Buyers from the banking sector accounted for 73.6 percent of the winning bidders, down 19.07 percentage points from last month’s sales of NT$30 billion in 182-day treasury bills, according to the statement.
Securities firms, which did not join the bid last time, made up 14.4 percent of the winning bidders.
The insurance sector made up 12 percent, up 4.67 percentage points from 7.33 percent recorded last month, it said.
The ministry said on Wednesday that it was scheduled to invite public tenders to bid for NT$28 billion in 91-day treasury bills on Friday next week. The bills would be launched between Nov. 1 and Nov. 3, and they should begin trading on Nov. 15, it said.
In a separate statement, the central bank said yesterday that local financial institutions are banned from buying Chinese yuan from lenders other than Bank of Taiwan (台灣銀行) and Mega International Commercial Bank (兆豐國際商銀), which were given approval to trade China’s currency in Taiwan earlier this week by the monetary policymaker.
On July 13, the People’s Bank of China (中國人民銀行) appointed Bank of China (中國銀行) to handle yuan transactions for Taiwanese banks through its Hong Kong unit.