90-day bills hit 22p.c.

Press, 5 December 1986, Page 24

90-day bills hit 22p.c.

PA Wellington • Long-term interest rates retreated a little on the money market yesterday. Prime 90-day commercial bills, however, hit 22 per cent for the first time since April 7. Benchmark five-year bonds which traded up to 17.8 per cent on Wednesday were down to 17.45 per cent by mid-morning yesterday. Three-year bonds were steady at 18.1 per cent, but were also showing signs of dropping a little. Dealers said the market appeared to have discounted most of the bad news and was now settling down. However, they said the bonds could easily go back up to 17.8 per cent The nervousness also applied to the short-term market On-call rates eased a little to 20.25 per cent (21.2 per cent on Wednesday) with continued Reserve Bank assistance, but the 90-day rate continued to rise. Dealers said 90-day trading was not large, but there was no sign of rates coming back off their new highs. Yesterday’s 90-day bill rate of 22 per cent was up from 21.35 per cent. The Reserve Bank injected $35 million at the short-end by advancing cash in sellback deals backed by December 23 stock at 20.69 to 21.15 per cent. Dealers bid $94 million.