Taiwan plans to issue T$80 billion (US $2.4 billion) to T$90 billion worth of government bonds in the third quarter, the finance ministry said on Saturday, to fund the state treasury.
The smaller issue in the third quarter, compared to previous quarters, was likely to support Taiwan's bond prices and pressure yields in the secondary market, even after the central bank raised rates earlier this week, dealers said.
"There is less supply of bonds in the market, which means that yields are likely to fall. However, it also depends on what the central bank thinks of the short-term rates," said a dealer. Dealers said the central bank has been trying to support overnight rates as part of efforts to curb capital outflows and support the weak Taiwan dollar.