Finance Ministry plans to sell $50m in bonds

The Finance Ministry will release interest-bearing USD-denominated treasury certificates, due to mature in one year, in a $50 million issue. This is the first currency-denominated government securities issue this year, following the four such releases in 2003. The bonds will be sold to both individuals and legal entities, either resident or not, and the par value per certificate is $10,000. Albeit the choice of dollars may seem a little bit strange, particularly since the previous foreign currency issue was euro-denominated, the Finance Ministry officials are probably relying on the dollar surplus that could be on the market at the moment. Why surplus? “The greater and greater demand for euro loans lately may lead to a situation when part of the banks, which see long-maturity dollar investments take up a significant share of their portfolios, may find little use for their dollars. The interests on investments abroad are rather low, arbitraging is probably not the most profitable move here and therefore liquidity in form of dollars may be high. The Finance Ministry must have noticed this and thought it would be a good time to refinance in dollars precisely at somewhat lower costs,” a banker said. ZF