Tender of $300M

Press, 11 October 1985, Page 14

Tender of $300M

PA Wellington A S3OOM Government stock tender will be held on Thursday next week, the Reserve Bank said. The offering will be SISOM of October 1991 stock and SISOM of August 1993 stock, with a coupon of 16 per cent in both cases.

The October 1991 stock is new to the tender programme, although previous tenders have sold March 1991 stock. August 1993 stock was introduced for the first time at last month’s tender.

In addition to the amounts offered at the public tender, the Reserve Bank and the Earthquake and War Damage Commission will buy S3OM of the 1991 stock and SI7M of the 1993 The tentative date for the following tender has been set at November 14.

The tenders are part of the Government’s programme of heavy domestic borrowing to fund the internal deficit, to maintain a tight monetary policy and eventually to bring down inflation and interest rates.

So far, however, interest rates have kept up high levels in line with inflation, and last month’s tender saw average rates of 19.6 per cent for 1991 stock and 18.8 per cent for 1993 stock. These rates have since firmed in the secondary market to 20.3 per cent and 19.55 per cent. Dealers said this pointed to rates being higher at next week’s tender than they were at the September one.