On Tuesday, the Moldovan Ministry of Finance earned 123.2 million lei (US$9.8 million) on selling government securities (GS) to Moldovan banks.

The MoF initially proposed the GS to a sum of 112 million lei, but the banks had a demand for 255.3 million lei. The average profitability of 91-day securities was about 7.02% and the profitability at the previous auction was the same – 7.02%; of 182-day securities – about 7.23%, compared to 7.36% at the previous auction; of 364-day securities – about 8.04% compared to 8.13% at the previous auction.

The MoF put up for sale the 91-day securities in the amount of 44 million lei when the demand was some 86.8 million lei; the 182-day securities - at the amount of 58.3 million lei when the demand was 101.8 million lei; and the 364-day papers to an amount of 20.9 million lei, when the demand was 66.7 million lei.

On Tuesday, banks had a demand on GS totaling 255.3 million lei, whereas the demand at the previous auction was about 243 million lei. The demand grew mainly on 364-day securities to an amount of nearly 66.7 million lei compared to 48.3 million lei at the previous auction.

An Eximbank-Gruppo Veneto Banca analyst said that Moldovan banks increase offers on 364-day securities because their profitability is bigger than that of short-term securities and National Bank certificates.

However, the grown demand for securities caused a fall of their profitability. Only in the first week, the interest rate on 182-day GS dropped by 0.13%, on 364-day GS – by 0.09%.

The MoF explains the GS rate fell in the second quarter because in 1Q2010 the Budget had modest revenues, so the Ministry had to resort to a paper issue in a large amount, and on the other side the MoF was ready to sell them at higher rates.
Infotag
[ 2010-07-21 ]