Bill rates surge
Short-term interest rates leapt yesterday as trading banks sought to meet their end-of-month liquidity ratios.
The banks are no longer tied to State ratios, but must meet internal ones. Market sources said that one trading bank in particular was strongly in the market.
Ninety-day bill rates rose to 35 per cent during the day, but eased to 23 to 24 per cent. There was a wide gap between borrowing and lending rates. Dealers said that banks seemed happier to finance their overnight positions by borrowing on-call than by selling bills or bonds. The surge in New Zealand interest rates was mirrored by a rise in Australia. The increase in short-term interest took Australian rates up to about 17 per cent. The surge caused a burst of trading on the Australian version of New Zealand’s PCP futures market. About 8250 lots were traded representing a delivery value of about sAust4.l billion.
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Press, 30 August 1985, Page 8
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153Bill rates surge Press, 30 August 1985, Page 8
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