Lisbon, Oct. 16, 2024 (Lusa) - Portugal's IGCP auctioned €750 million in debt on Wednesday, the minimum of the indicative amount, at an average yield of 2.666%, lower than the previous comparable auction in June (3.420%), it was announced.
According to the IGCP - Treasury and Public Debt Management Agency page on Bloomberg, demand totalled €2.075 billion, 2.77 times the amount auctioned.
IGCP had announced that the Treasury Bills (BT) auctioned today would mature on 19 September 2025 (around 11 months) and that the indicative amount was between €750 million and €1 billion.
In the previous comparable auction on 19 June, Portugal auctioned €650 million in 11-month BT at an average yield of 3.420%, lower than in the previous auction with this maturity on 17 April (3.457%). Demand totalled €1.622 billion, 2.5 times the amount auctioned.
Commenting on today's auction, Filipe Silva, Investment Director at Banco Carregosa, said that there had been ‘a significant drop in the rate’, from 3.420% in June to 2.666% today, ‘in such a short space of time because the central banks have started the process of lowering rates. It is expected that the ECB will lower rates twice more by the year’s end", he said.
‘Economies have been slowing down with growth forecasts being revised downwards, inflation appears to be under control, which is leading central banks to adjust monetary policy,’ said Filipe Silva, considering that ’short-term rates, which were quite high, have fallen the most and this is reflected in short-term debt auctions, allowing Portugal to have a much lower risk premium than in the past.’
The agency that manages Portuguese debt predicts that financing through Treasury Bills should increase in 2024, ‘from an estimate in the third quarter of €3.4 billion to €4.8 billion’, according to the update of the Portuguese Republic's Financing Programme for the 4th quarter of 2024, released in September.
In this update, IGCP said that two BT auctions were planned for the fourth quarter of the year, with an indicative amount of between €750 million and €1bn.
The first auction was today, and the second is scheduled for 20 November.
MC/ADB // ADB.
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