SYDNEY: Australia on Thursday sold A$550 million ($409.7 million) 2021 government debt at minus 0.01%, below the official cash rate of 0.1%, joining a raft of developed countries whose debt offers negative yields.

The Australian Office of Financial Management (AOFM), which manages the federal government's debt, said its March 2021 Treasury note sale received bids worth A$8.2 billion, nearly 5.5 times the offering of A$1.5 billion.

The government sold 37% of the debt at minus 0.01%, the lowest yield accepted, the AOFM said.

While government bonds indexed to inflation have been sold at negative rates in the past, this is the first time a Treasury note was sold below 0%.

The Reserve Bank of Australia (RBA) slashed its official cash rate thrice this year to a record low 0.1% to cushion the blow to the economy from the coronavirus pandemic.

Bank officials have said in the past it was not impossible for wholesale lending rates to dip below zero.

Six-month overnight interest rates swaps are closer to zero while three-year yields on government bonds are at 0.1%.