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Portugal issues BT at the lowest rate
Demand exceeded supply by 2.77 times
Portugal issued 11-month treasury bills, placing 750 million euros. Compared to the last comparable auction, there was a significant drop in the rate from 3.646% in June to 2.66%, with demand outstripping supply by 2.77 times.
"We are in a new interest rate regime. The central banks have started the process of cutting rates and the ECB is expected to cut rates twice more by the end of the year. This movement is the factor that has led us to see such a significant drop in such a short space of time. Economies have been slowing down with growth forecasts being revised downwards, inflation appears to be under control, which has led central banks to adjust monetary policy. Short-term rates, which were quite high, have fallen the most and this is reflected in the short-term debt auctions, allowing Portugal to have a much lower risk premium than in the past,” according to Filipe Silva, investment director at Banco Carregosa.