The auctions of the last three-four weeks reflect the current budget situation in the Republic. The Ministry of finance increased the volume of domestic borrowing despite rather high yields of the government T-bills. As the situation on the Russian and other financial markets does not give much hope on the receipt of 'cheap money', the issuer has nothing to do but let the yields grow further to keep up with the budget deficit.

The last auction of 3 month T-bills was oversubscribed 2.6 times, which shows a considerable, though lower than the week ago, interest of the dealers in these papers. The issuer of the government T-bills (the Ministry of finance and the National Bank) keeps to the same policy - higher yields and high volumes of borrowing - allowing the traders to bid lower at the auction.

The latest auction of 12 month T-bills recorded the highest volume of the issue in the history of their circulation. The placed volume exceeded by almost 45% the previous highest volume record.