ECONOMY

T-bills raise 1.6 bln euros; yields drop

The government sold a total of 1.6 billion euros of 26- and 52-week Treasury bills yesterday as it moves to plug a growing fiscal shortfall. The auction by the country’s Public Debt Management Agency (PDMA) produced a uniform yield of 0.91 percent for the 52-week T-bill, down from 1.12 percent in a previous July 14 auction. The 26-week yield came to 0.59 percent, down from 0.91 percent in the previous auction. Dealers attributed the yield drop in the T-bill auction to strong demand by primary dealers amid low interest rates in the euro area. «The auction went well, there is plenty of liquidity on the market and the supply was absorbed easily,» said a bond trader at a Greek bank who declined to be named, Reuters reported. With the week set for a deluge of eurozone debt supply, the T-bill issue was smoothly absorbed. The bid-to-cover ratio was 4.44 versus 4.82 in the previous July auction. As much as 35 billion euros of eurozone debt will come to the market this week. Greece has borrowed more than 50 billion euros so far this year, around a fifth of the country’s GDP, to cover redemptions and deficits. According to some press reports, the government will need to borrow an additional 10 billion euros by the end of the year to cover budgetary needs.