Turkey's Treasury has auctioned 5.6 billion Turkish Liras (US$2.53 billion) in three bond auctions Tuesday, in what will be a test of foreign demand for Turkish assets after January's interest rate hike.
The Central Bank's website said that one 24-month semi-annual Fixed Bond Coupons (new issuance) with 5.35 percent coupon rate was sold with maturity for February 24, 2016.
The 24-month semi-annual Fixed Bond Coupons was sold at a 10.88 percent simple interest rate and an 11.18 percent compound interest.
The second auction was for 5-year semi-annual CPI Indexed Bond (new issuance) with a 1.75 percent coupon.
The 5-year semi-annual CPI Indexed Bond was sold with maturity on February 20, 2019. It was sold at a 3.35 percent simple interest rate and an 3.38 percent compound interest.
The third auction was a 10-year semi-annual Fixed Coupon Bond (re-open) with 4.40 percent coupon. It was sold at a 10.34 percent simple interest rate and a 10.61 percent compound interest with maturity on September 27, 2023.
The treasury auctions has completed its scheduled auctions for borrowing in February. The domestic debt rollover ratio occurred at 87.5 percent, within range of analysts' expectations.
However, the treasury’s cost of borrowing has increased in auctions after a rate hike on January 28 by Turkey's central bank.
Analyst said that the market would focus on the next week auction for the Treasury´s March borrowing.
Haluk Burumcekci, chief economist of Burgan Security, a Turkey-based investment house, said the Treasury auctions' interest rates did not decline due to the five more auctions in the first week of March to redeem US$16.6 billion.
“In addition, political uncertainties in the country and the central bank´s monetary policy with the high level of overnight interest rates have limited the interest rate decline further," he added.
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