Treasury bond market remains stable after the decrease of interest rate

Treasury bond market seems to have found serenity in the last days of 2014. The decrease of the latest key interest rate in November did not bring significant movement in the market. In this week’s auctions, the annual bonds were issued with a weighted average interest rate of 3.31%, almost the same values with the last auction last month. The same thing happened to 6-month maturity bonds, which were quoted at an average interest rate of 3.16%.

The bonds are ending the year with a lower interest rate compared to the same period a year ago. The last quarter of the year has brought a slight correction growing interest, because in September they had touched the lowest levels of all time. Stabilization of interest appears result of a more restrained application of the banking system for securities that year had invested surplus liquidity in these instruments.

Ministry of Finance and the banking system experts expect interest to have a slight increase over the next year. Already, lending has slightly improved, while the bank deposit growth has almost stopped. This means that the banking system has less redundancy liquidity, while further improving the country’s private activity will increase demand for financing from banks.