Greece raised €1.138 billion at an auction of six-month Treasury bills yesterday, moving the full amount on offer in the first of two sales this month as it tries to roll over debt and navigate its way through a cash crunch.

Despite Athens’ increasingly dire financial position, it was able to find domestic buyers to plug a gap of about €350 million stemming from foreign investors’ refusal to roll over their own Greek T-bill holdings.

The T-bills were sold at a yield of 2.97 per cent, however, unchanged from a previous sale in March and the highest rate in 11 months. Athens is now paying to borrow for six months almost twice what Portugal pays to borrow for 10 years.

Deputy Finance Minister Dimitris Mardas put a brave face on the situation.

“It was a successful issue,” he said. “Domestic investors covered the whole issue, including the share held by foreign investors.”

The sale’s bid-cover ratio was 1.30, unchanged from March, showing no deterioration in demand despite tight liquidity conditions. The amount raised included €263 million in non-competitive bids. The settlement date for yesterday’s auction will be April 14.

Shut out of debt markets and with aid from official creditors frozen, Greece has scrambled to cope with April redemption payments including €2.4 billion of maturing T-bills and a €450 million outlay to the International Monetary Fund due today.

T-bills are the only source of commercial borrowing for the country’s leftist-led coalition government which has already hit a €15 billion cap on such issues set by its EU/IMF lenders.

The European Central Bank has turned down Greece’s appeals to raise the limit on short-term debt issuance on grounds that the EU treaty bars monetary financing of governments.

Greek banks – the main buyers in auctions – have been told by the ECB they cannot add to their holdings of Greek government debt to plug any gap resulting from foreign investors fleeing the sales.

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