Financial Services, Investments, Latvia, Legislation

Demand for the Latvian government securities at the auction was 4.6 times higher than the amount offered at the auction by the Treasury.

The average weighted yield rate on the T-bills maturing on May 23, 2016, was minus 0.302 percent at the auction this Thursday (minus 0.294 percent at the previous auction on March 30). Five bidders at the auction demanded EUR 230 million worth of these government securities, while the supply from the State Treasury was EUR 50 million.

This year the Treasury started offering a new borrowing instrument – T-bills with a maturity of 21 days, the with aim to ensure effective cash management process. The first auction of 21-day T-bills took place on January 28.

The Treasury said that, unlike other Latvian government securities, it is not planned to hold a non-competitive fixed rate auctions due to a short maturity of this instrument and characteristics of the expected investor base. The 21-day T-bills auctions are planned at the end of each calendar month with the settlement on the first working day of the following month.

The auctions of the Latvian government securities are held by the Nasdaq Riga stock exchange, while clearing is performed by the Latvian Central Depository of Securities. From 2005 to the end of 2015, the Latvian government has raised EUR 5.6 billion by selling securities at such auctions.