Crucial T-bill auction approaches for Greece

Greece will try to raise 3.125 billion euros ($3.8 billion) in an auction of three-month treasury bills on Tuesday to try to avoid a looming cash crunch.

“This is to cover the country’s current needs and avoid finding ourselves in a dead-end,» a Finance Ministry official said on Friday as the government finds itself in great need of cash to pay salaries and pensions and faces redeeming a 3.2-billion-euro bond held by the European Central Bank on August 20.

While Greece has been shut out of the long-term debt markets since 2010, it has regularly issued short-term debt, although the Tuesday auction dwarfs previous placements.

Greece raised 812.5 million euros on Tuesday in an auction of six-month treasury bills, paying a slightly lower rate of 4.68 percent.

In its last three-month treasury bill sale, on July 17, Greece raised 1.625 billion euros at a slightly lower rate of 4.28 percent.