The ministry of finance has sold PLN 3.01bn at the main auction and another PLN 1.01 at a non-cash supplementary auction in bonds of series PS0718 (maturing in July of 2018) and DS1023 (maturing in October of 2023), or EUR 0.96bn, vs. the combined value of supply at PLN 3.0-5.0bn.
It sold the shorter note at yield of 3.88% (vs. 3.69% at the January auction), while the market expected it at above 4.54% (vs. 4.34% in January). Market expectations were above 3.85% and 4.53-4.54%, respectively.
Analysts estimate that after this auction, the ministry of finance has secured around 60% of this year's state budget borrowing needs (totalling around PLN 132.5bn, or EUR 31.8bn). However, they note that the ministry failed to sell its entire offer as investors were asking for higher yields.
Still, the size of demand shows that Polish Treasury papers are still popular, while the zloty's strengthening shortly prior to the auction suggests that a significant part of buyers came from abroad.
As of February, Polish privately-owned open pension funds (OFEs) are forbidden to invest in Treasury debt instruments.
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