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Portugal puts 1,250 million euros in 6 and 12 months.  High interests - bonds

Portugal puts 1,250 million euros in 6 and 12 months. High interests – bonds

Portugal put on Wednesday 1,250 million euros in six- and 12-month Treasury (BT) issues, in the first double auction of the second quarter.

The Republic paid a higher interest than in the previous similar operation. IGCP – Agência de Gestão da Tesouraria e da Dívida Pública issued €440 million in six months BT, maturing in March 2023, at a yield of 1.291%, a snapshot of the average interest rate -0.179%, in the last operation on May 18.

In the 12-month issue, 810 million euros were raised, with a return of 1.916%. In the last comparable issue, the institute led by Miguel Martin issued €875 million at an average interest rate of 0.236%. In this “long-term” version, demand exceeded supply by 1.55 times, while in BT mode for six months, the “coverage width” was 2.92 times.

The movement of “returns” in the primary market was accompanied by an increase in interest rates in the secondary market. For Felipe Silva, investment manager at Banco Carregosa, this behavior can be explained by the behavior of monetary policy by central banks.

“Central banks continue to pursue tight monetary policies, trying to rein in inflation, while at the same time trying to mitigate the impact on the economy,” explains Felipe Silva. The costs of financing new issues that are brought to the market,” he adds.

Portugal was no exception, and national debt yields worsened across all maturities, renewing the five-year cap, even as the spread against 10-year German bonds – a European market benchmark – remained stable, which for investment manager Banco Carregosa mirrors The good moment for the economy.”

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However, Philip Silva predicts that “the era of negative interest rates has come to an end”, and so “the cost of debt servicing will continue to increase.”

However, “if central banks achieve their targets, the sudden increases we have seen will weaken in the long run,” the expert protects.

During Wednesday’s session, interest on six-month debt on the secondary market was fixed at 0.565%, while the “yield” on 12-month debt worsened to 1.252%.

The news was updated at 10:59 with comments from Filipe Silva, Banco Carregosa’s Chief Investment Officer).