May 22, 2018 / 10:34 AM / a year ago

Croatia T-bill auctions focused on zero-yield euro bills

    ZAGREB, May 22 (Reuters) - Croatia sold 190 million kuna
($30.45 million) and 28 million euros ($33.10 million) worth of
one-year treasury bills in two separate auctions on Tuesday,
Finance Ministry data showed.
    The sale of kuna bills fell well below a 400 million kuna
target, while the sale of euro bills beat a targeted 20 million
euros. The yield on kuna bills was flat at 0.09 percent, while
the euro paper dropped one basis point to 0.00 percent.
    "Despite no yield on euro papers their sale went better
because it is better for the local banks to invest into the
local treasury bills with no yield than to keep the surplus of
euros deposited at foreign banks with a negative interest rate,"
a local market participant said.
    More than 90 percent of Croatian lenders are owned by
European Union banks, while the inflow of euros is rising amid a
higher number of foreign tourists for the summer season.
    The ministry occasionally also auctions bills with
three-month and six-month maturities.
    After the auction, Croatia's overall short-term debt in the
local currency fell to 19.23 billion kuna from 19.44 billion.
    The short-term debt in euros rose to 70.2 million euros from
62.2 million euros.
    The next auction will be held on May 29, but will include
only the bills denominated in kuna. 
    Below are the details of Tuesday's auction:
               Auction date                    Previous auction
                 22/05/18                           02/05/18
 1-year maturity                     
 Yield              0.09                             0.09 
 Assigned price   99.915                            99.915
 Offered         400 mln HRK                       400 mln HRK
 Total bids      190 mln HRK                       502 mln HRK
 Assigned        190 mln HRK                       502 mln HRK
 Yield              0.00                             0.01 *
 Assigned price  100.00                             99.990
 Offered          20 mln EUR                        20 mln EUR
 Total bids       28 mln EUR                        11.1 mln EUR
 Assigned         28 mln EUR                        11.1 mln EUR
NOTE - *One-year euro-denominated bills were last auctioned on
Oct. 24, 2017.
 ($1 = 6.2393 kuna)
 ($1 = 0.8459 euros)

 (Reporting by Igor Ilic
Editing by Alexander Smith)
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