Three-month interest marks maximum since 2011

Three-month interest marks maximum since 2011


He Public treasure has placed this Tuesday 2,036.27 million euros in letters at three and nine months, that is, in the middle band of its objectives (had been proposed collect between 1,500 and 2,500 million). He has done so by paying higher interest on both references.

The demand in the issue has tripled what was finally awarded, according to data from the Bank of Spain (BdE). The total requests for both assets have exceeded 6,261 million euros. Therefore, the bid ratio (difference between what was demanded and what was finally placed) has been very high, 3.07 timeshighlights Efe.

In detail, the Treasury has raised 440.87 million in bills for one quarter, compared to demand five times higher (2,210 million euros), and in the nine-month bills the requests have escalated to 4,050 million (of which 1,595.4 million euros have been awarded), Europa Press reports.

What is the profitability of Treasury bills?

According to data published by the BdEthe Treasury has awarded three-month bills today with a marginal profitability 3.74%surpassing 3.538% of the previous auction (held almost a month ago) and marking a high since November 2011. Likewise, the average interest rate has been above 3.7% (at 3.703% specifically).

Regarding three-quarter Treasury bills, the marginal yield has climbed in the 3.504% from the previous 3.492%. As for the average rate, it was 3.483%, remaining below three and a half percentage points.

Why are interest rates on letters rising?

The decisions of monetary politics They affect Treasury auctions which, especially last year, have seen the remuneration offered to investors increase. This is a consequence of the rapid and strong increases in interest rates that the European Central Bank (ECB) carried out from July 2022 until last September.

The aforementioned increase in the cost of money caused the willingness to buy debt to increase, especially on the part of households. And the current yields on Treasury bills beat the current inflation rate in Spain (the consumer price index, or CPI, was 3.4% in January). In short, the purchase of these low-risk assets prevents the loss of purchasing power.

This Tuesday’s auction was held after the Governing Council of the ECB decided less than two weeks ago to maintain the price of money, for the third consecutive time. Thus, the reference rate for its refinancing operations remains at 4.5%, while the deposit rate remains at 4% (historical maximum) and the loan facility rate is at 4.75%.

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