Investors scramble to buy up fixed-rate 10-year treasurys ahead of rates cut

Analysts see the dropping inflation rate, the shrinking current account deficit and high interest rates as the main reasons why investors scrambled to buy fixed-rate 10 year treasury bonds worth some zl. 800 million on Wednesday. As demand exceeded supply three times over, the ministry managed to sell bonds at advantageous prices, decreasing profitability from 12.8% to 10.3%. According to Pawel Kielek, an analyst from investment bank ABN Amro, investors were ready to pay more in hopes that interest rates will soon be cut. "The market expects interest rates to be lowered by 3.5 to 4 percentage points this year," said Kielek (Gazeta Wyborcza, p.18) M.K.