Short-term rates ease

Press, 20 October 1987, Page 26

Short-term rates ease

PA Wellington Short-term money market rates eased in quiet New Zealand trading yesterday, but short-term direction was unclear. The call rate fell to 22 per cent mid-session against 23.75 per cent on Friday, while 90-day rates dropped to 20.15 per cent against 20.65 per cent on Friday. Dealers said the demand for funding from the currency market had declined, taking some pressure off short-term rates. New Zealand Government bond yields fell in quiet trading and further gradual easing is expected medium-term, dealers said. Benchmark. July, 1992, bonds fell to 16.37 per cent from 16.43 per cent before Friday’s mid-day bond tender, in which the

July, 1992, bonds’ weighted average was 16.36 per cent Dealers said there were a number of bullish factors —- a more stable New Zealand dollar, nervousness in the equities market and a positive outlook for lower inflation. But a sharp fall in rates was inhibited by high. shortterm funding costs. The Reserve Bank will not be offering any Treasury bills in its regular weekly Treasury bill tender scheduled for today. The bank said in a statement that cash flows to Government are expected to offset cash injections. It expects to conduct open market operations as usual, after which the daily cash balance should fluctuate around $2O million over the week.