Another drop of retail bond yields

The Finance Ministry has lowered yields on all retail treasury bonds in October. This is the third consecutive yield cut (albeit the August cut involved only selected types of securities). “The yield on wholesale bonds fell in September to a historic low. This means that, in line with out earlier announcements, we will continue the cycle of lowering interest on savings bonds,” said Piotr Marczak, head of Public Debt Department at the Finance Ministry. “Despite the cut, savings bonds remains very attractive compared to the yields on wholesale bonds. For example, the yield on two-year bonds has been set at 2.4 percent, while the yield on corresponding wholesale bonds is a little over 1.9 percent,” he added. The yield on two-year bonds dropped to 2.4 percent from 2.6 percent in May, the yield on three-year bonds was cut from 2.8 percent to 2.6 percent. The yield on four-year bonds will now stand at 2.8 percent (previously at 3.1 percent), and the yield on ten-year bonds will be 3.3 percent (previously 3.6 percent). A total of PLN 1 billion worth of two-year bonds has been issued, and PLN 500 million worth of three-, four- and ten-year bonds each. Before the series of cuts the yields had remained unchanged since May 2013.