Additional exchange fund bills totalling $18 billion will be offered in tenders on March 16, 23 and 30 to meet banks' increased demand for the paper given the abundance of liquidity in the banking system, the Monetary Authority announced today.

The issuance of additional exchange fund paper will be conducted by expanding the supply of three-month and six-month Exchange Fund Bills.

The three-month bills, to be tendered March 16, 23 and 30, will be increased by a total of $4 billion, while the six-month bills, to be offered March 16 and 23, will be expanded by $5 billion in total.

In addition, a new issue of six-month bills, with a size of $9 billion, will be offered on March 30 and the issue will be rolled over upon maturity.

The aggregate balance is projected to decline by $5.5 billion on March 17, by $2 billion on March 24, and by $10.5 billion on March 31.

The authority said the additional issuance simply represents a change in the composition of the monetary base, with a shift from the aggregate balance to exchange fund paper.