November 3, 2015 / 11:13 AM / 2 years ago

Qatar central bank halves T-bill sale, yields jump

DUBAI, Nov 3 (Reuters) - Qatar’s central bank halved the size of a planned Treasury bill sale on Tuesday and yields rose sharply in a fresh sign of tightening liquidity in Gulf banking systems due to low oil prices.

The central bank said it auctioned a total of 2 billion riyals ($550 million) of three-, six- and nine-month T-bills. Last week, it had announced it planned to sell twice that volume at the monthly bill sale on Tuesday.

Three-month bills were sold at a yield of 1.27 percent at the latest auction, up from 0.99 percent at the central bank’s last sale a month ago.

Short-term interest rates have been rising around the Gulf as lower oil and gas revenues leave banks less flush with cash. Qatar’s three-month interbank offered rate hit 1.422 percent on Tuesday, up from around 1.20 percent at the end of September.

The central bank also halved the size of last month’s T-bill sale, the first time since at least the start of this year that it did not sell a planned amount of bills.

After that sale, central bank chief Sheikh Abdullah bin Saud al-Thani said liquidity in the markets remained strong and that he saw no reason to imitate any U.S. rate hike, despite the riyal’s peg to the U.S. dollar. (Reporting by Andrew Torchia; Editing by Dominic Evans)

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