(Adds comment from government spokeswoman)
By Rosalba O'Brien
SANTIAGO May 5 Chile's finance ministry on
Monday scrapped the previous government's plans for issuing
short-term treasury bills in 2014, citing problems with the way
they had been designed.
In January, the ministry, then part of conservative
Sebastian Pinera's government, had said that it would issue
short-term treasury bills this year, for the first time in the
history of Chile.
The debt, with maturity under a year, would optimize the
management of the government's temporary cash surplus and raise
short-term liquidity standards in line with international best
practice, the ministry said at the time, adding that the
schedule would be announced once legal procedures were
But on Monday, the ministry - now under the control of
center-left Michelle Bachelet, who took power in March - said
alongside its publication of the 2014 bond schedule that
short-term treasury bills would not be issued this year.
"As they were designed, the treasury bills did not improve
handling of the cash surplus," said a spokeswoman for the
finance ministry in comments emailed to Reuters.
"On the contrary, it was thought they would produce
liquidity problems in the short-term market, so the
administration decided to continue to analyze their benefits and
costs in order to determine their eventual future use."
Chile's new government did however stick to the previous
administration's plans to issue 6 billion dollars' worth of
longer-dated Treasury bonds in the local market in 2014.
The local currency bonds would be issued monthly from May 13
to Dec. 10, the government confirmed on Monday.
(Editing by W Simon and Nick Zieminski)