Only $47M in $110M taken

Press, 22 April 1986, Page 24

Only $47M in $110M taken

PA Wellington The Reserve Bank yesterday morning offered to inject SIIOM into the banking system to help ease short-term liquidity, but banks and dealers took up only S47M of the offer. The Reserve Bank bought SISM of eight-day Treasury bills at 20.26 to 20.36 per cent, and bought S32M of nine-day securities by way of sell-back at 20.85 to 21.15 per cent. In spite of the injection, oncall money market rates remained slightly higher than usual this morning at 22.5 per cent. The level until last week was usually 18-20 per cent. But long-term interest rates continued easing on the money markets, settling below rates set at the SSOOM tender on Friday. Three-year stock was at 18 per cent (tender 18.6 per cent), five-year stock was at 17.3 per cent (tender 17.9 per cent) and eight-year stock was at 16.8 per cent (tender 17.3 per cent). Dealers said the lower secondary market rates re-

fleeted the heavy over-sub-cription of the tender, but several dealers said they were surprised at how far rates had dropped since the tender. Meanwhile, prime 90-day bills, which eased steadily last week, were slightly firmer at 21 per cent, as against 20.6 per cent on Friday. This week’s Treasury bill tender will be for S7OM of 14day bills, the Reserve Bank said.