Commercial banks oversubscribed the Finance Ministry's 25th issue of three-month treasury bills Tuesday, leading analysts to say that the government's plans to drastically expand the treasury-bill program next year might be feasible.


Banks placed some 1.613 trillion rubles ($492 million) in bids for the 1.4 trillion ruble issue, according to reports by the Moscow Interbank Currency Exchange, where the trade takes place.


Annualized yields on the bills averaged 244.72 percent, about the same as at the 24th auction in November and significantly higher than the Central Bank's annual refinancing rate of 180 percent.


"If the government lowers its refinancing rate, which it is bound to do, and deals with the T-bills program as seriously as it does now, the T-bills thing will work out," said Alexei Dolgikh, a securities expert with the Troika Dialog brokerage firm, referring to the government's plans to issue around 40 trillion rubles in securities within the forthcoming year to help cover its budget deficit.


The T-bill program suffered a serious setback due to the ruble's dramatic plunge against the dollar in October, but analysts said that money is now flowing freely back into the stabilized ruble markets.


Sergei Krikun, chief economist with securities department at Tveruniversalbank, said that low interest rates on loans have made T-bills seem more attractive.


Annualized rates on 90-day interbank loans now hover around 170 percent.


"Money is growing cheaper, so banks have to turn to state treasury bills," he said.


However, Krikun said that banks are mainly interested in three-month bills, and that the government's attempts to sell more six-month bills and one-year bonds might still undermine the whole program.


"Interest in half-year bills is slight and interest in one-year bonds is next to nothing," Krikun said.