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Who is buying Irish treasury bonds at negative interest rate and why?

  • 10-06-2020 11:43pm
    #1
    rookieMan
    Registered Users Posts: 33 ✭


    This might have been asked before but I am really not able to find this answer. Irish government has recently issues 6 months bonds at negative interest rate. Why would anyone want to lose money buying these bonds? The duration (6 months) is so short that it even make sit hard to sell it in secondary market to profit off change in interest rates. If the banks are buying them, why not keep their money with themselves ?

    Example : https://www.rte.ie/amp/1130859/


Comments

  • #2
    Kilboor
    Registered Users Posts: 1,224 ✭✭✭Kilboor


    rookieMan wrote: »
    This might have been asked before but I am really mot able to find this answer. Irish government has recently issues 6 months bonds at negative interest rate. Why would anyone want to lose money buying these bonds? The duration (6 months) is so short that it even make sit hard to sell it in secondary market to profit off change in interest rates. If the banks are buying them, why not keep their money with themselves ?

    Example : https://www.rte.ie/amp/1130859/

    Asset allocation for risky market plays from hedge funds and other investment entities.

    Currency plays, deflation (unlikely with the economic policies in place), more expensive to hold cash i.e. not taking any gambles during the crisis which a lot of investors are doing.


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