Benchmark rates drop by over 400 bps, but still higher than JDX short-term notes
TREASURY bill rates dropped over 400 basis points (bps) in the latest issues of the short-term instruments.
Investors last week bid average yield of 11.68 per cent and 12.50 per cent on three-month and six-month T-bills respectively, down from 15.95 per cent and 16.8 per cent in the mid-December issue.
The benchmark rates fell dramatically as the Jamaica Debt Exchange (JDX) initiative, which involves the lowering of interest rates on domestic public debt aimed at reducing interest cost to the Government by $40 billion in the upcoming fiscal year.
Incidentally the T-bill rates came in higher than the lowest rates being offered under the JDX — 11 per cent on FR0.25 and 11.25 per cent on FR0.5, which matures in three months and six months respectively.
Those new bonds will each make up one-fifth of a short fixed-rate package available to holders of Government of Jamaica notes that mature by December 31, 2010.
