The Ministry of Finance cancelled a 3-month T-bill auction that was scheduled to be held on September 1 because the yields demanded by dealers were too high, said a ministry official to Reuters on Tuesday. According to the official, the Ministry of Finance has no need to resort to expensive borrowings as seen recently in Russia's market because Kazakhstan's debt servicing costs were much below those in Russia.

The average yield on the latest 6-month T-bill issue increased to 19.51% at an auction held on August 31. The Ministry of Finance experienced great pressure from market operators that were seeking acceptable yields on government securities. The increasing Tenge devaluation rate forces brokers to speculate for the decline or not to participate in T-bill auctions. This was reflected in the absence of bids from non-residents, "tough" prices, and low demand at the latest 6-month T-bill auction. The Ministry of Finance didn't risk to meet all the bids and chose to underplace the issue by almost KZT 200m with a planned volume of KZT 700m.