The profitability of 6- and 12-month bills has fallen in the auction held this Tuesday, the first after the pause in the rate hike decided by the European Central Bank (ECB) in October. Once again, households have been a key driver of demand.
In the 12-month debt, the Bank of Spain has placed 3,629.64 million at an average interest of 3.606%, thus reducing its profitability by more than two tenths, since the previous reference was 3.862%.
In the case of 6-month bills, the Treasury channeled 1,002.67 million at an average interest of 3.709%, compared to the 3.823% remuneration it gave a month ago. The coverage ratio was 2.73, so there was strong demand for these securities.
As in previous auctions, the demand from retail investors was notable, since non-competitive requests – which in most cases correspond to this holder – rose to 1,617.73 million euros, almost 38% of the amount awarded.
Households have shown a strong interest in short-term debt in the last year and, in fact, in August they became the main holder of short-term public debt for the first time in history, with 20,348 million euros in portfolio , almost 30% of this short-term debt outstanding.
In the nearest calendar, on November 14, 3 and 9 month bills will be auctioned and on November 16 there will be another auction of State bonds and obligations.
With this auction, the Treasury begins to complete its gross financing objective for all of 2023, which amounts to 256,846 million for the entire year. The organization's intention has been to capture the bulk of the debt in the first part of the year, a common practice within the institution but which takes on special importance this year given the successive interest rate increases by the ECB.
The organization expects to reduce its net issuance by 5,000 million euros this year, up to 70,000 million.
