THE central bank remained unperturbed by market concerns over low interest rates in a hyperinflationary environment and continued to suppress bids asking for higher rates on its daily treasury bill (TB) auctions.
paper, which the Reserve Bank had abandoned on August 4, bounced back on Tuesday with an average rate of 66,33%, down on the old rate of 200% when the central bank last issued the three-month paper.
“As expected, there was an awful stampede for it as total bids of $12,1 billion were received yet the central bank only allotted $1 billion,” equities firm, Kingdom Stockbrokers, said in its weekly commentary to investors.
“Surprisingly, one bank went in at 200% and obviously got nothing. The highest tendered rate was 200% while the lowest was 50%,” Kingdom said.
The stockbroking company said indications were that Tuesday’s tender “was only meant to align rates to what has happened to six months and one-year papers”.
“For instance, the 181-day rate, which stood at 250% prior to its stoppage on August 31, resurfaced on Tuesday (12/09/06) and Wednesday (13/09/06) lower at 199% and 143,44%, respectively. Last week the paper was on offer since Tuesday (19/09/06) and the rate closed lower at 128,5% while on Wednesday (20/09/06) it slumped further to 105.91%,” the firm’s analyst said in the weekly report.
On Monday, the rate closed even lower at 100,93%.
The 365-day Treasury bill that had early this month stabilised at 300% fell to 192,38% when the central bank brought it back during the middle of the month.
Last week, the rate closed lower on Friday at 150%. — Staff Writer.