Interest rates paid on Government of Jamaica Treasury bills continue to fall with the latest auction held on July 22, saw the rates on the 91 days and 182 days instrument declining from the out-turn of the June auction. At the mid-July auction of the 30 day Treasury bills the rate also recorded small decrease.
The rates at Wednesday’s auction, fell from 6.48 percent to 6.44 percent, for the instrument of 91 day duration and from 6.63 percent to 6.60 percent for the 182 days duration. Since the start of the year the rate for the 182 days instrument has slipped from 7.14 percent at the December auction or 8 percent. The 30 days instrument had fallen from 6.23 percent in June to 6.22 percent in July.
While $800 million chased after the $400 million 182 days instrument only $486 million went after the shorter term, 91 days one with an offering of the $400 million, an indication that investors see rates continuing to decline over the longer period, hence the greater desire to tie up yields for the next six months.
Lower rates if they are sustained on government bonds should lead to lower borrowing cost in the future, but for persons looking to fixed interest securities for income this will mean lower income for them unless they switch to other forms of investments. Lower interest rates make stocks more attractive and owning other forms of fixed assets such as real estate.

Interest rates paid on Government of Jamaica Treasury bills continue to fall with the latest auction held on July 22, saw the rates on the 91 days and 182 days instrument declining from the out-turn of the June auction. At the mid-July auction of the 30 day Treasury bills the rate also recorded small decrease.
The rates at Wednesday’s auction, fell from 6.48 percent to 6.44 percent, for the instrument of 91 day duration and from 6.63 percent to 6.60 percent for the 182 days duration. Since the start of the year the rate for the 182 days instrument has slipped from 7.14 percent at the December auction or 8 percent. The 30 days instrument had fallen from 6.23 percent in June to 6.22 percent in July.
While $800 million chased after the $400 million 182 days instrument only $486 million went after the shorter term, 91 days one with an offering of the $400 million, an indication that investors see rates continuing to decline over the longer period, hence the greater desire to tie up yields for the next six months.
Lower rates if they are sustained on government bonds should lead to lower borrowing cost in the future, but for persons looking to fixed interest securities for income this will mean lower income for them unless they switch to other forms of investments. Lower interest rates make stocks more attractive and owning other forms of fixed assets such as real estate.