T-bills spurned by investors

Investors spurned the latest issues of treasury bills with two of the four offerings for the month being heavily under subscribed and with the yields rising, albeit modestly.
All four issues had offerings of $400 million each but while the 30 days instrument received bids of $474,943,600 and ended with a yield of 5.37 percent the same level as the previous issue, the 91 days received $508,470,400 at a yield that rose from 5.65 percent to 5.80 percent, the 181 days received just 366,081,700 with the yield rising from 5.82 percent to 5.91 percent and the nine months instrument saw just $167,987,400 and enjoyed an average yield of 6.414 percent.
The rates are slightly ahead of the Bank of Jamaica’s 30 days CD rate of 5.25 percent which has been in place since 2016. With inflation for the first four months of the year at negative 1.7 percent it seems that the central Bank’s inflation target of 5.5 percent is far too high and should be adjusted down and with it a lowering in the CD rate.