NEW YORK, Nov 3 (Reuters) - The U.S. Treasury Department on Tuesday sold $50 billion of one-month bills at an interest rate of 0.07 percent, which was the second highest since February 2014, Treasury data showed.
This was the first one-month bill auction since U.S. President Barack Obama on Monday signed into law a two-year budget deal and a suspension of the federal debt ceiling into March 2017.
In the wake of an increase of the government’s borrowing capacity, the Treasury aims to replenish a depleted coffer. On Friday, it had $23 billion of cash on hand, which pushed it close to a default this week.
Analysts widely forecast the Treasury will ramp up T-bill issuance to bring its cash balance back up to at least $150 billion in the coming weeks.
Tuesday’s $50 billion one-month T-bill supply was the largest for this debt maturity in 11 months.
The weekly one-month bill offering was cut to $5 billion three weeks ago and held at that level until Tuesday.
The ratio of bids to the amount offered of the latest one-month issue was 3.46, which was the lowest since Aug. 25. Last week, the bid-to-cover ratio was 3.75. (Reporting by Richard Leong; Editing by Chizu Nomiyama)