Further rate rises expected

Press, 10 September 1987, Page 23

Further rate rises expected

PA Wellington New Zealand money market term rates firmed in a thin morning market yesterday, with further rises expected short-term during the September taxflow period. The 30-day bank bills rose to 19.82 per cent mid-session from 19.60 per cent Tuesday midsession, and 90-day bank bill rates rose to 19.74 per cent against 19.55 per cent Call was steady at 19.75 per cent Dealers said large tax payments are due today and tomorrow, and combined with tight liquidity management, this may push term rates higher. Call, however, looked to have reached its peak around current levels, they added. Government stock yields edged higher in a quiet morning market

with further rises expected short-term in line with continued firm shortterm money market rates, dealers said. February 1992 stock rose to 16.85 per cent mid-session against 16.81 per cent Tuesday midsession, and July 1992 stock traded at 16.55 per cent against 16.50. “The call rate is driving everything,” a dealer said. Several dealers expect tight liquidity management to maintain firm bond yields after the current September tax flows are completed. And the Reserve Bank withdrew $lO million from the money market yesterday by selling Treasury bills. The bills, which mature on September 23, were sold at an Interest rate of 19.75 per cent. Bids totalled $45 million.