Pressure on Govt stock

Press, 13 June 1986, Page 8

Pressure on Govt stock

PA Wellington Strong buying pressure continued to push Government stock interest rates down on the money market yesterday. Dealers said buyers were picking up stock on the secondary market in the belief that rates at yesterday’s $5OO million tender would go lower still. They said there was plenty of spare investment cash in the community at present, and that with short-term rates at their lowest levels of the year, Government stock rates had to fall. The trend was good for the Government’s hopes of lower

interest rates, and for retail borrowers, whose loans, including mortgages, were based on rates set at the stock tenders. Market quotes for Government stock were three years 15.35 per cent (15.55 per cent on Wednesday), five years 15.1 per cent (15.55 per cent) and 10 years 14.8 per cent (15.05). Prime 90-day commercial bills were steady at 14.7 per cent. On-call money firmed marginally to 12.75 per cent from Wednesday’s 11.5 per cent. There were no Reserve Bank operations in the shortterm money market.