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. Last Updated: 07/27/2016

Banks Oversubscribe T-Bills

Commercial banks oversubscribed the Finance Ministry's latest issue of six-month treasury bills, but the government refrained from selling the full issue in an attempt to hold down the bills' yield.

Banks placed a total of 725.2 billion rubles ($215.3 million) in bids for the 600 billion ruble issue, according to data from the Moscow Interbank Currency Exchange.

But the government discarded low bids that would have led to a higher yield, selling just 457.6 billion rubles' worth of the bills at an average annualized yield of 300.9 percent, slightly down from 308.2 percent at the last auction of six-month bills in November but still well above the Central Bank's refinancing rate of 180 percent.

The high yield -- more than double current interest rates on three-month interbank loans -- suggests that commercial banks still see the the six-month instruments as considerably more risky than their three-month counterparts.

Banks snapped up a 1.4-trillion-ruble issue of three-month bills last week an at average annualized interest rate of 244.72 percent. The government has been trying to move towards longer-term securities but banks have been slow to respond.