Bill yields increased

Press, 7 November 1978, Page 26

Bill yields increased

PA Wellington; The Minister of Finance (Mr Muldoon) announced last night that the yields available for investors in ■ new Treasury Bills would be increased to 10.5 per cent' for three month bills (pre- j viousiy 8.5 per cent) and six I month bills (previously 9 per cent) as from today. He also said the Reserve Bank would be increasing the yields at which it would sell Government stock to specialised dealers as follows (previous rates in

; brackets): one year stock. 10.5 per cent (9.25). Two year stock. 10.5 per cent (9.5), five year stock, 10 per cent (9.75). The 10-year rate would reI main unchanged at 10 per ’cent, Mr Muldoon said. Mr Muldoon said that I these moves were consistent ’ with the promotion of the current issue of savings stock and indicated the Government’s determination to I ensure that the stimulus’ being given to the economy. through fiscal measures did! not have an undesirable im-'

. pact on the balance of pay-| dments and the rate of ■inflation. ■’ These interest rates were ’not for a new cash loan, but | were the first major devel- ■ opments in the Government’s recently announced : open market operations, he said. “By holding the long , term rate at 10 per cent the Government is indicating its confidence that the higher short-term interest rates will ’be necessary for a relatively! 'short period only,” he said, ’