Tax-free popular savings bonds with a yield exceeding last month’s inflation rate will be made available to the public February 17 to 21, the Finance Ministry announced yesterday. Up to a billion euros will be offered in this first issue, one of three offerings of 12-month bonds planned by the ministry this year as part of a strategy to shore up the savings of retail investors hit by falling interest rates and above-average inflation. A total of 2.5 billion euros has been programmed for the three issues, with the remaining offerings tentatively scheduled for May and September. With an interest rate of 3.6 percent, «the yield is half a percentage point above January inflation,» said Finance Minister Nikos Christodoulakis. Consumer prices last month eased to 3.1 percent from 3.4 percent in December. The government is targeting an average rate of 2.5-3 percent this year. Investors who redeem their bonds before maturity will, however, have to pay a 10-percent withholding tax. The ministry’s decision to proceed with a popular savings bond dubbed populist by many came as the International Monetary Fund questioned the wisdom of such a move. In a country report released yesterday, the Washington-based body said, «Plans to provide above-market rates of return on popular savings bonds run counter to the general direction toward market-oriented reforms.» Defending the bonds, Christodoulakis said the securities do not constitute traditional investment products as they will not be traded in secondary markets. The bonds can be purchased at banks and Postal Savings Bank and Bank of Greece outlets. Investors can acquire up to 10,000 euros of bonds. The securities will be issued on February 26.