NTMA to sell €500m of Treasury Bills amid negative yields

Yields on Irish bonds up to 2020 currently below zero

The country’s debt office plans to sell €500 million of short-term debt this week, marking its second such auction so far this year.

The National Treasury Management Agency will sell the six-month Treasury Bills on Thursday, it said in a statement. The yield on the bills is expected to be negative.

The debt agency’s last T-Bills sale was priced with a negative yield of 0.22 per cent, meaning investors are paying the state to hold their money. The yield on the last three T-Bills sold has been below zero.

Last week, global bond guru Bill Gross of Janus Capital said that with yields on $10 trillion (€8.9 trillion) of long-term government bonds from Japan to Germany now at their "lowest in 500 years of recorded history" in negative territory, central bank policies of ultra-low rates will eventually backfire.

Ireland’s government debt due to be repaid by October 2020 is currently trading in the market with negative yields.

“This is a supernova that will explode one day,” he said via Twitter. Rather than spurring economic growth, low rates are promoting asset bubbles, while savers and industries rely on interest rates, such as banks and insurers, are punished, Mr Gross has said in the past.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times