The Finance Ministry raised the average yield on 6-month T-bills to 20.02% from the previous 19.51% at the latest auction on 26 October. The auction was undersubscribed and the placed volume was slashed to KZT 50.1m (USD 0.61m).

The auction of 3-month T-bills held by the Finance Ministry and the National Bank on 27 October was much more successful for the issuer than the previous day's auction. The placed volume, KZT 609.5m (USD 7.48m), exceeded the targeted volume of KZT 400m (USD 4.91m).

By compromising on T-bill yields, the Finance Ministry has shown its readiness to co-operate with banks. "We showed that we will be more flexible in terms of yield, but we won't raise it too much," said the Deputy Finance Minister, Daniyar Abulgazin, to Reuters. According to him, banks, who had long been unhappy with the yields that the Finance Ministry held, will now come back to the auctions. He added, however, that the Finance Ministry will continue its tough borrowing policies and will reduce budget spending rather than resort to costly borrowing. (Reuters)