The central bank yesterday sold NT$20 billion (US$678.5 million) in 273-day treasury bills at a yield of 0.767 percent, higher than the 0.7 percent recorded in December sales, the bank said in a statement.
However, the bills’ yield was lower than the 0.78 percent for 91-day certificates of deposit (CD) and 0.88 percent for 182-day CDs that were also sold yesterday — indicating the banking system -remains awash with liquidity.
The result of the sales of treasury bills and CDs, coupled with the release on Monday of central bank data showing record-high construction loans of NT$1.307 trillion last month, is further evidence of excess liquidity, which could influence the central bank when it holds its quarterly policy meeting tomorrow.
The central bank is expected to raise its policy rate by 12.5 basis points for the fourth consecutive quarter, boosting its rediscount rate to 1.75 percent from 1.625 percent.
The central bank, which was commissioned by the Ministry of Finance to auction the bills, said that the sale of the 273-day treasury bills maturing on Dec. 28 attracted 4.17 times the amount of notes on offer.
The bank also sold a total of NT$51 billion in CDs in 30-day, 91-day and 182-day maturities, more than the NT$10.2 billion that matured, according to a separate statement.
Buyers from the banking sector accounted for 95 percent of the winning bidders, up from 75.07 percent in last month’s sales of NT$25 billion in 182-day treasury bills, according to the statement.
Securities firms made up 5 percent of the winning bidders, down from 8 percent in last month’s sales, while the insurance sector did not participate in yesterday’s sales. Last month, the insurance sector made up 16.93 percent of the winning bidders.
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