October 23 (SeeNews) - Romania on Monday rejected all bids in a 300 million lei ($77 million/65 million euro) auction of Treasury notes due on October 26, 2020, central bank data showed.
Demand in the auction amounted to 380 million lei.
At the previous auction of the same T-note issue held in September, the finance ministry sold out a planned offer of 500 million lei at a yield of 1.91%.
This is the sixth consecutive auction in October in which the finance ministry has rejected all bids. The ministry has said it planned to raise 2.44 billion lei in auctions of government paper this month.
In October, Romania's central bank BNR offered funds to the local banks through the third REPO operation in October but the demand for funds was zero. At the previous two auctions, BNR injected in the banking sector a total of 13.5 billion lei in order to cover the liquidity shortage which emerged in the money market starting from mid-September. Last week, Raiffeisen Bank said that they we expect the liquidity shortage in the money market to persist for several more weeks.
Commenting ahead of Monday's auction, Raiffeisen Bank analysts noted that this is the last auction in October and the last opportunity to test the investors’ interest towards lei-denominated government securities.
For their part, OTP Bank analysts commented that the rejection of all bids in October came after yields increased remarkably recently.
"On Friday, the yield curve shifted 5 basis points higher, tracking the general trend in the Eurozone and the USA," OTP analysts said on Monday in a daily report on Romania.
Details follow:
Auction date |
October 23 |
September 27 |
Amount offered (mln lei) |
300.0 |
500.0 |
Amount sold (mln lei) |
- |
500.0 |
Total bids placed (mln lei) |
380.0 |
952.7 |
Bid-to-cover ratio |
1.26 |
1.90 |
Yield (%) |
- |
1.91 |
Romania's finance ministry has said it planned to auction 2.2 billion lei worth of government securities and to sell an additional 240 million lei in non-competitive offers in October.
In September, the ministry auctioned 3.35 billion lei worth of domestic debt paper and an additional 405 million lei in non-competitive offers, slightly below target.
On Wednesday, the finance ministry raised 1 billion euro ($1.17 billion) through the sale of 10-year Eurobonds at a yield of 2.114% amidst solid demand. According to the ministry, with the transaction, Romania closed its 2017 external financing plan of 3 billion euro.
So far this year, the ministry has sold some 37.5 billion lei and 340 million euro worth of government bills and bonds and has tapped foreign markets for 2.75 billion euro of 2027 and 2035 Eurobonds. In June, the ministry said it planned to sell 7.5 billion euro worth of Eurobonds on international markets in 2018 and 2019.
The ministry said it plans to sell some 48-50 billion lei worth of leu-denominated domestic debt this year.
In June, the ministry said it planned to sell 7.5 billion euro worth of Eurobonds on international markets in 2018 and 2019.
(1 euro=4.5988 lei)