Why ‘minus interest’ occurred in the Treasury auction?


The Ministry of Treasury and Finance went to borrow 18 billion 72.3 million liras in the 2 bond auctions it held today.

The negative real interest rate in the CPI-indexed bond auction was remarkable.

In the re-issuance of CPI indexed government bonds with a maturity of 6 years (2177 days), a real coupon payment of 1.45 percent every 6 months; real simple interest minus 2.59%, real compound interest minus 2.57 percent it happened.

In the tender, where the nominal bid reached 12 billion 207 million liras, nominal sales were recorded as 4 billion 84.5 million liras and net sales as 10 billion 287.5 million liras.

In the tender, in which all of the 400 million lira bids from public institutions were met, market makers 14 billion 269.5 million lira offer and 4 billion lira of sales was made to this segment.

Economists shared that the negative real interest rate in the auction reflects the inflation expectations and the current yield curve. In other words, there was so much demand for bonds to hedge against inflation that banks and investors even agreed to negative real interest rates.

23.25% interest in the two-year auction

In the first tender, the Ministry re-issued government bonds with a maturity of 2 years (602 days), a coupon payment of 8.6 percent every 6 months, and a fixed coupon.

In the tender, simple interest was 22.04 percent and compound interest was 23.25 percent.

In the tender, where the nominal bid reached 3 billion 606.5 million liras, nominal sales were 1 billion 996 million liras, net sales were 1 billion 984.8 million liras. News recorded as ra.

In the tender, in which all of the 400 million TL bids from public institutions were met, 1 billion 761 million TL bids were received from market makers and 1 billion TL was sold to this segment.


Source: Dünya Gazetesi by www.dunya.com.

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