Yields on Czech two-year government bonds fell deeper into negative territory at an auction on November 25, encouraging the issuer meet its maximum target for sales volume.

The finance ministry sold CZK8bn (€296mn) of the two-year zero coupon bonds, the central bank said. The average yield fell to -0.349% from -0.332% at the previous auction held two weeks ago.

This was the fourth tranche of the issue after a pilot in early September, when the average yield stood at -0.212%. Demand at the latest auction strengthened as the value of bids increased to CZK12bn from CZK11.4bn submitted at the November 11 auction.

Also offered were 0.35% coupon bonds maturing in 2020, of which the ministry sold CZK2.42bn. The issue attracted bids of CZK4.62bn and the average yield stood at -0.80%. The ministry also sold CZK3bn of a floating rate bond maturing on November 19, 2027.

The Czech government is enjoying negative funding costs on maturities of up to five years thanks to the abundant liquidity in the financial sector, which is triggered by the central bank’s currency interventions. Still, the ministry has said it is not willing to extend its issuance activity in a bid to stabilise debt at current levels.

Czech Finance Minister Andrej Babis, however, said earlier this week that issuance will be stronger in 2016 as the ministry plans to take advantage of the low borrowing costs. The ministry plans to issue at least CZK150bn in new debt next year.