Treasury bill

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Treasury Bill

A debt security backed by the full faith and credit of the United States government with a maturity of one year or less. Very commonly, T bills have a maturity of a few weeks to a few months. They are purchased at a discount and then redeemed for par; T bills do not pay interest. For example, an investor may purchase a $5,000 bill for $4,500. While he/she will not earn any coupon payments, he/she will receive $5,000 in no more than a year. They are low-risk, low-return investments. Private investors may purchase T bills in small quantities, but the bulk of the T bill market comes from institutional investors, especially banks. See also: Treasury note, Treasury bond.

Treasury bill

A short-term debt security of the U.S. government that is sold in minimum amounts of $10,000 and multiples of $5,000 above the minimum. Bills with 13-week and 26-week maturities are auctioned each Monday, and 52-week bills are sold every 4 weeks. These obligations, which are very easy to resell, may be purchased through brokers, commercial banks, or directly from the Federal Reserve. Also called T bill. See also bank-discount basis, certificate of indebtedness, Form PD 4633-1.

Treasury bill (T-bill).

Treasury bills are the shortest-term government debt securities.

They are issued with a maturity date of 4, 13, or 26 weeks. The 13- and 26-week bills are sold weekly by competitive auction to institutional investors, and to noncompetitive bidders through Treasury Direct for the same price paid by the competitive bidders.

Treasury bill

a redeemable FINANCIAL SECURITY bearing a three-month redemption date which is issued by the Bank of England. Some Treasury bills are purchased on tap at undisclosed sums by government departments with temporary cash surpluses, but the vast majority are sold at periodic tender auctions to DISCOUNT HOUSES and overseas banks. Treasury bills bear a nominal face value which is repaid in full on redemption, but the price paid for them on issue depends on the outcome of a competitive tender, with discount houses and overseas banks bidding against each other for an allocation. The Treasury bills which are bought by the discount houses are usually then sold (rediscounted) in the DISCOUNT MARKET to other buyers, principally to COMMERCIAL BANKS which hold them as part of their ‘liquidity base’ to support their lending operations. Treasury bills are issued alongside BONDS both to raise finance for the government to cover BUDGET deficits and also as a means of controlling the MONEY SUPPLY and level of INTEREST RATES. See MONETARY POLICY.

Treasury bill

a FINANCIAL SECURITY issued by a country's CENTRAL BANK as a means for the government to borrow money for short periods of time. In the UK, three-month Treasury bills are issued by the BANK OF ENGLAND through the DISCOUNT MARKET. Most Treasury bills are purchased initially by the DISCOUNT HOUSES and then, in the main, sold (rediscounted) principally to the COMMERCIAL BANKS, which hold them as part of their liquidity base to support their lending operations.

Treasury bills constitute a significant part of the commercial banks’ RESERVE ASSET RATIO. Thus, the monetary authorities use Treasury bills to regulate the liquidity base of the banking system in order to control the MONEY SUPPLY. For example, if the authorities wish to expand the money supply, they can issue more Treasury bills, which increases the liquidity base of the banking system and induces a multiple expansion of bank deposits. See also BANK-DEPOSIT CREATION, FUNDING, REPO RATE OF INTEREST, MONETARY POLICY COMMITTEE, PUBLIC-SECTOR BORROWING REQUIREMENT.

References in periodicals archive ?
Rates of the Philippines' Treasury bills (T-bills) ended mixed Monday, with the shorter tenors registering drops but demand remained strong.
THE Bureau of the Treasury (BTr) has awarded the full P15 billion on offer in its latest auction for Treasury bills (T-bills) as rates for the government security were low on the back of the strong liquidity in the market.
'We expect this to continue in the short-term, given the discipline of the CBK in stabilising interest rates in the auction market by rejecting aggressive bids that are priced above market, for both T-bills and T-bonds,' Cytonn said in its weekly report.
Nigerian banks are highly reliant on net interest income for profitability and T-bills proved to be an important source of profits in 2017.
The one-year or 364-day T-bill attracted the highest excess subscription of Sh14.5 billion compared to the offer of Sh10 billion and achieved a market average rate of 11.174 per cent with the rate accepted standing at 11.156 per cent lower than in the previous auction.Analysts said that the accepted yields indicated that the T-bill auctions were on a downward trend just as is the direction of the yield curve, which shows the yields that various fixed-income instruments are giving.
The Qatar central bank has announced that it has sold T-bills for the first time in 2016.
The minimum accepted order in the T-Bills market is BD5,000 or its equivalent in the T-Bill currency.
The government's previous 13-week T-bill worth e1/4100 mln yielded 1.58% on October 2, again significantly lower than the previous e1/4100 mln auction on August 31 with a yield of 1.87% and the higher 2.18% for e1/4144 mln of 13-week T-bills sold on July 2.
On 24th April, at the current exchange rate), the Mainistry of Public Finance (MFP) has raised RON 1.3 bln (some 0.291 bln euros from the commercial banks,which runs in Romania via two issues of government securities: a six-month T-bill issue and a bond issue with a residual maturity of 7 years and two months, reads an announcement on the website of the National Bank of Romania (BNR).
The yield on the one-month T-bill nearly doubled in only a few hours, going from 0.18 percent early Tuesday to 0.34 percent by the afternoon.
Fixed income dealers say that market liquidity is returning to normal after the central bank tightened the rules on where banks could invest, which in turn forced some money market funds to unwind T-bill positions.
The Public Debt Management Agency said the 13-week loans were auctioned Tuesday at an interest rate of 4.02 per cent, roughly unchanged from a T-bill sale last month.