U.S. Treasury could increase bill issuance later in year -official
WASHINGTON, May 4 (Reuters) - U.S. Treasury officials said on Wednesday the department will hold auction sizes steady in the second quarter but might need to increase the supply of bills after new regulations on money market funds take effect in October.
"(The) Treasury expects that the supply of bills will increase to a prudent level with the existing auction schedule," Acting Assistant Treasury Secretary Daleep Singh said in a statement. "As such, Treasury announces that is it maintaining nominal coupon auction sizes at current levels."
The department had announced in February it would study reductions in coupon issuance to make way for higher issuance of bills.
But a Treasury official told reporters on Wednesday that the department would study the need for increasing bill issuance after money market reforms are implemented by the Securities and Exchange Commission. Those rules are expected to take effect in October and could increase demand for U.S. Treasury bills.
The official said the November refunding announcement would be a logical time to consider increasing bill issuance.
In its quarterly refunding announcement on Wednesday, Treasury said it would auction $62 billion in coupon debt next week.
Issuance of Treasury Inflation-Protected Securities will also be reduced by $6 billion over the upcoming quarter. (Reporting by Jason Lange; Editing by Paul Simao)
