Average bill yield 13.8 p.c.

Press, 24 January 1986, Page 12

Average bill yield 13.8 p.c.

PA Wellington The Reserve Bank entered the money mar-, ket again yesterday selling $5O million of eightday Treasury bills at an average yield of 13.8 per cent. The low interest rate reflects present on-call or overnight rates, which were running yesterday at 11-12 per cent. Dealers said the Reserve Bank appeared to be leaving reasonably high levels of cash in the banking system in a bid to avoid the wild fluctuations in short-term rates which

had sometimes been seen in the past. This had led to lower on-call rates this week.

The banking system had also gained liquidity from the SIOOM stock tender default money which had not been taken into Government coffers last week, dealers said. The key feature of the money market this week was the S4OOM January Government stock tender held yesterday. The results will be known at noon today. Yesterday morning’s secondary market rates

for Government stock were similar to those of Wednesday and dealers said the market had easily absorbed the announcement that the defaulted stock will be retendered next week. October 1991 stock is now at 19.3 per cent, as against the 16.69 per cent successful, but defaulted, bid at the December tender. This maturity was again being tendered yesterday. Other maturities on offer were the shorter-term September, 1989, and the longer-term July, 1994.