NTMA raises €750m of short-term debt at negative rate

The National Treasury Management Agency (NTMA) sold €750 million of short-term debt on Thursday in an auction, with the notes priced to carry a negative interest rate – continuing a trend that began in late 2015.

The agency, which manages funding for the State, said the new so-called treasury bills that mature in December were priced to yield investors minus 0.49 per cent, meaning that buyers of the notes are paying the Government to hold their money for the period. The rate was marginally lower than that attached to bills issued in another auction last month.

The NTMA received demand for 3.8 times the amount of debt that was on offer in the latest auction, it said.

Ireland has been selling treasury bills at a negative rate since late 2015, taking advantage of a low interest rate environment.

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Short-term liquidity

Treasury bills are used to provide governments with short-term liquidity as they rely on long-term bond markets to fund budget shortfalls and debt refinancings.

The agency raised €6 billion earlier this month through the sale of 10-year bonds, bringing its long-term debt issuance so far this year to €18.5 billion. The NTMA plans to raise a total of between €20 billion and €24 billion of long-term funding this year, mainly to help the Government deal with the health and economic costs of dealing with the Covid-19 pandemic.