August 6, 2019 / 3:48 PM / 13 days ago

UPDATE 1-U.S. Treasury to sell record amount of 2-month bills

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NEW YORK, Aug 6 (Reuters) - The U.S. Treasury Department said on Tuesday it will sell $40 billion of two-month bills on Thursday, which is a record high amount of this maturity at an auction, as it increases its short-term borrowing to replenish its coffer.

The government’s cash stockpile had been dwindling before U.S. President Donald Trump and federal lawmakers reached a two-year spending deal that allows for more borrowing to meet its obligations.

The Treasury would issue anywhere from $100 billion to $200 billion in additional T-bill supply, beginning in August in an effort to increase federal cash holdings to $350 billion by the end of September, analysts said.

The government’s cash position stood at $133.67 billion on Friday, down from $423 billion at the end of April.

To reach an expected level of $350 billion by the end of September, most Wall Street analysts are projecting the Treasury would ramp up its weekly offerings of one-month and two-month T-bills in combination with issuance of cash management bills.

Meanwhile, the Treasury will sell $50 billion in one-month bills on Thursday, the highest amount for this maturity since May 16.

Reporting by Richard Leong in New York Editing by Matthew Lewis

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