NTMA raises €500m at cheapest rate ever for Irish bonds

ECB has been driving negative interest rates in euro zone with bond-buying programme

The funds carry a negative rate of 0.43%. Photograph: iStock

The funds carry a negative rate of 0.43%. Photograph: iStock

 

The National Treasury Management Agency sold €500 million of short-term debt, known as Treasury Bills, in an auction on Thursday, with the notes priced to yield a negative rate of 0.43 per cent.

That means that investors in the 12-month notes are paying the State’s debt agency a 0.43 per cent rate for the privilege of holding their money.

Bond-buying programme

The rate is the cheapest money the NTMA has ever issued, coming in slightly wider than the 0.42 per cent negative rate attached to one-year Bills sold by the agency last December.

The European Central Bank’s €2.3 trillion bond-buying programme, or quantitative easing, is responsible for driving short- to medium-term interest rates across the euro zone into negative territory in recent years.

Economists largely expect the ECB to signal in September how it plans to taper bond purchases further from next year.