The finance ministry’s Public Debt Management Office said that the government sold a total of €100m in 13-week treasury bills at an average yield of 0.02 per cent, which is the lowest ever.
Subscriptions to the issue were four times as high and included, also for the very first time in Cyprus’s history, bids bearing a negative yield, the PDMO said in a statement on its website on Tuesday. The maximum yield of bids received was 0.19 per cent while the minimum was 0.02 per cent in the negative area.
“There is increased liquidity in the market and there are not many other options to invest,” a source familiar with the matter commented in a telephone interview on condition of anonymity. “Banks have a lot of cash and depositing it at the central bank comes now at a cost. There is therefore a lot of competition among banks and they reduce the proposed yields”.
The previous time the government issued this type of security, on November 28, the government sold again €100m at an average yield of 0.17 per cent.