Stock tenders ‘aberation’

Press, 3 November 1983, Page 8

Stock tenders ‘aberation’

PA Wellington Results of the second tender of Government stock were not satisfactory, said the' Associate Minister of Finance, Mr Falloon, yesterday. He hoped the result was an aberration. ‘ - Mr Falloon said thatbids received: for Z the second tender in {October were 'ady sligktlymorethanthetotal stock tendered were leMMtisfactdrythanvthe result*/ of "the heavily oversubscribed first tender. "Distribution . ?of; bids across the three maturities offend, wait such that there Sir the three-year stock,’’ he toM the Bankers’ Institute have beetf

l -., caused by a sharp tightenI ' ‘ ing oi liquidity in the bank- : ing system during the week I of the tender. “This, of course, flowed • on to the interest rates bid, resulting in rates slightly up - on the first tender. *tWe hope - these .results 1 were something of an aber- ’ ration, as they were out; of H fine with longer-term trends in market interest rates and ■'. / are. inconsistent with the Government’s over-all interest rate objectives.”, s ? Mr..Falloon tfiit ■ under other circumstances,’ tfie Qovernment might have exercised its right to reject bids * that were too high. * But because the system 5 was still .flew “andthose participating in it were still TSleanring,” the bids wereac*cepted. -