Dear readers, the 6-month T-bill for March 24 is code-named as BS24103H and before we take a look at the interest rates (cut-off yields) for this and future T-bill, let us take a look at the February 2024, 6-month T-bill, BS24102S which closed recently.
The auction date of BS24102S was 1 Feb 24, issue date was 6 Feb 24 and maturity date of the T-bill was 6 Aug 24, given that the 6-month maturity date of the T-bill.
The cut-off yield of BS24102S was 3.54%, which is lower than that of the 3.70% cut-off yield of the preceding Jan 24 T-bill. This is not unexpected given that interest rates for this year are expected to decline in general, in tandem with the interest rate outlooks provided by the US Federal Reserves. In fact, I have projected in an earlier post, for an estimated 3.50% cut-off yield for BS24102S which is very close to that of the actual cut-off yield (3.54%).
So, what will be the cut-off yield (interest rates) for the next 6-month T-bill (BS24103H) and beyond? Let us take a look at cut-off yields of previous 6-month T-bills first, as follows:
BS24102S, auction date: 1 Feb 24; cut-off yield of 3.54% per annum.
BS24101Z, auction date: 18 Jan 24; cut-off yield of 3.70% per annum.
BS24100F, auction date: 4 Jan 24; cut-off yield of 3.74% per annum.
BS23125H, auction date: 20 Dec 23; cut-off yield of 3.73% per annum.
BS23124Z, auction date: 7 Dec 23; cut-off yield of 3.74% per annum.
BS23123Z, auction date: 23 Nov 23; cut-off yield of 3.80% per annum.
BS23122F, auction date: 8 Nov 23; cut-off yield of 3.75% per annum.
BS23121A, auction date: 26 Oct 23; cut-off yield of 3.95% per annum.
BS23120A, auction date: 12 Oct 23; cut-off yield of 3.87% per annum.
BS23119H, auction date: 28 Sep 23; cut-off yield of 4.07% per annum.
BS23118F, auction date: 14 Sep 23; cut-off yield of 3.73% per annum.
Will we see a further reduction of 0.20% per annum reduction for BS24103H so that the cut-off interest reaches 3.34%? While this can be possible, but from what I have noticed, successive steep cut-off yield reductions are rare, and hence I would think that for BS24103H, the cut-off yield should be in the range of 3.40% to 3.50% per annum.
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