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Government obligation, issued for periods of three to 12 months. T-bills are traded on a discount basis. They are the most liquid form of short-term investment.

Treasury bills are a common form of sovereign short-term debt, Treasury Bills (TBills) are issued by many governments of the world. Typically issued through the central bank with maturities ranging from four weeks to two years, they bear no interest, are issued at a discount to face value and redeemed at par.

Central banks can manage the supply of Treasury Bills as part of their undertaking to maintain adequate liquidity within the domestic banking system. Many countries auction their TBills. This enables the central bank to cut the cost of the debt by accepting the highest bids.

The primary market participants are principally banks (one reason for their demand is that Treasury Bills provide a high quality liquid asset which attracts a low cost in terms of capital adequacy requirements). The secondary markets for TBills are very large and almost without exception highly liquid.

As sovereign issues they offer the highest levels of security; TBills normally trade at yields below those of other money market instruments because of their lower credit risk.

Examples of national TBill issues are :- TBills (USA), DTC's (Dutch Treasury Certificates), Bons du Tresor a Taux Fixe et Interet Precomptes - BTF (France), Buoni Ordinari del Tesoro - BOT (Italy), Letras Del Tesoro (Spain), Cetes - peso denominated TBill (Mexico), Tesobono - US dollar denominated TBill (Mexico), SBI (Indonesia)

(Financial Terminology Database, Bank of England)

Source Publication:
Coordinated Portfolio Investment Survey Guide, Second Edition, International Monetary Fund, 2002, Washington DC. Appendix VI: Definition and Description of Instruments.


Statistical Theme: Financial statistics

Created on Tuesday, September 25, 2001

Last updated on Friday, March 14, 2003