Treasury plans to address changes in any seasonal borrowing needs over the next quarter through changes in regular bill auction sizes and/or cash management bills
Cash Management bills
are being used by the central bank to modulate liquidity, although they are short-term instruments that are normally used by the government to overcome temporary cash flow mismatches.
One action Treasury has undertaken has been to reduce its reliance on cash management bills
Separately yesterday, the Treasury Department announced plans to sell pounds 27billion of notes and bonds next week as well as $20 billion of cash management bills
to help finance government spending on everything from Social Security to national defence .
SOLD: The Treasury Department sold 36-day cash management bills
Thursday, the last leg of its quarterly refunding.
The balance of Treasury financing requirements will be met with the weekly bill auctions, cash management bills
, the monthly note and bond auctions, the August 5-year TIPS reopening auction, the September 10-year TIPS reopening auction, the October 30-year TIPS reopening auction, and the regular monthly 2-year Floating Rate Note (FRN) auctions.
The frequency of sale of cash management bills
and open market operations on government bonds will reduce as the yield in interest on longer tenor bonds poses threat to the already fragile economic recovery.
Of this amount, about $760 billion was from the increase in debt held by the public, which included $300 billion in cash management bills
issued in September 2008 under the Supplementary Financing Program initiated by Treasury.