#Open journalism No news is bad news

Your contributions will help us continue to deliver the stories that are important to you

Support The Journal
Dublin: 17°C Monday 18 October 2021
Advertisement

NTMA holds short-term bill auction to calm markets

A pre-scheduled treasury bond issue gives Ireland a chance to soothe investors’ fears.

Dear investors: Ooh, money! Can we have some please? Thanks, Ireland.
Image: Public Domain Photos via Flickr

THE NATIONAL TREASURY MANAGEMENT AGENCY (NTMA) is to hold a treasury bill auction today, hoping that a strong investor uptake will help the country soothe the fears of jittery investors.

The price of the interest offered on bills and bonds auctioned by the NTMA depends on how much investors demand – which in turn is determined by whether investors are confident or nervous about the chance of their original investment not being returned.

Today’s auction – of short-term treasury bills, maturing between three months and a year – will hope to raise €600m for the Exchequer, but also act as an early chance for Ireland to put the impact of the Standard & Poor’s ratings downgrade behind it.

A strongly-contested auction would drive rates down, showing that investors might be taking the S&P downgrade with a pinch of salt.

The NTMA itself criticised S&P’s decision to decrease Ireland’s rating to AA- from AA on Monday night, saying the projections assumed that the final cost of the banking bailout would vastly exceed the costs projected domestically.

Bids for the auction are closing about now (10:30am), and the yields will be disclosed later today.

About the author:

Gavan Reilly

Read next:

COMMENTS