U.S. Treasury increases amount of 3-month bill supply

[October 30, 2015]  NEW YORK (Reuters) - The U.S. Treasury Department said on Thursday it will sell $28 billion of three-month bills next Monday, $2 billion more than what it sold earlier this week, while it kept its six-month bill auction size unchanged at $26 billion.

The three-month and six-month T-bill sales come a day before a Nov. 3 deadline, which Treasury Secretary Jack Lew said was when the government would no longer be able to issue more debt if the federal borrowing limit were not raised.

Analysts forecast the Treasury would run out of cash by mid-November, which might postpone payments on its debt obligations and a partial government shutdown.

The Treasury said it had $49 billion in cash on hand on Tuesday, far below the level of $150 billion or so it tries to maintain under normal circumstances.

Late Wednesday, the House of Representatives approved a deal between the White House and top Republican lawmakers which would set a two-year budget and extend the federal debt ceiling, currently at $18.1 trillion, through March 2017.

The Senate still needs to vote on this proposal. Some conservatives have vowed to block it.

(Reporting by Richard Leong; Editing by Chizu Nomiyama)

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