On May 17, the Ministry of Finance attracted almost Hr 7.5bn ($253m) to the state budget through local currency bills, which is 50% more than the previous week’s borrowings.
Demand at the auction was distributed almost evenly between short-term zero-coupon bills maturing this year and the new 1.5-year paper — Hr 3.7bn ($126m) and Hr 3.8bn ($130m), respectively, at face value.
The lowest demand, and almost identical to last week, was demand for three-month securities at Hr 1.3bn ($46m), though the number of bids for six-month paper fell slightly from Hr 3.5bn ($119m) last week to Hr 2.4bn ($81m) on May 17. The 1.5-year paper, as expected, received the greatest demand yesterday.
The total volume of bids was just Hr 87m ($3m) on May 10, while demand on May 17 was up more than 44 times, most likely thanks to investors who decided to diversify their support for the government during wartime by buying longer bills.
The total amount of funds received by the state budget from the domestic bond market in May has already exceeded Hr 19bn ($644m).
If the level of demand remains close to that on May 17 for the next two weeks, we can expect the level of domestic budget financing to remain stable at about Hr 30bn (S$1bn) per month.
Complete report (4 pages, 264KB) Research team: Taras Kotovych
