Cyprus T-bill yields drop as demand surges to €83 million

For the second consecutive month, the interest rate on short-term bonds issued by the Republic of Cyprus has declined, with increased demand compressing the offered yields.

According to data released by the Public Debt Management Office (PDMO), in the 13-week Treasury Bills auction for July held on Monday, July 22, bids amounting to €25 million were accepted, with a weighted average yield of 3.67 per cent.

This marks the third consecutive month of declining yields for the 13-week Treasury Bills.

During Monday’s auction, the total value of bids received amounted to €83.1 million, more than three times the announced amount of €25 million.

Accepted yields ranged from 3.65 per cent to 3.69 per cent, compared to the range of 3.72 per cent to 3.77 per cent in the previous auction.

The highest yield this year was recorded in the October auction at 4.05 per cent, with yields subsequently declining.

It is noteworthy that last June, the ECB implemented the first reduction in its key interest rates, with the deposit facility rate decreasing by 25 basis points to 3.75 per cent.

However, Ioannis Petri, CEO of Athlos Capital, told the Cyprus News Agency (CNA) that he believes that many depositors have begun opting for Treasury Bills as a means to secure returns through a safe financial instrument.

“We see depositors now coming forward and wanting to invest money in such products, money that would otherwise be deposited in banks with lower returns,” Petri said, adding that the Sophic platform, created by Athlos Capital, increases access to these products.

“Cypriot depositors feel familiar with the Republic of Cyprus Treasury Bills, and with the platform, we have made these products more accessible to private investors and businesses, who can now invest in Treasury Bills, gaining better returns and, most importantly, more security,” he concluded.