Government's $1.2 billion bond to mop up excess cash released by the sale of local banking group RBTT, has been oversubscribed by investors.

The auction of the bond was the first by Government for the year and was aimed at addressing domestic liquidity management.

Issued on July 2, the bond matures in 2017 and has a coupon rate of 8.25 per cent.

Compared to the advertised maximum amount of $1.2 billion, the total bids received for the bond amounted to $1.976 billion, the Central Bank said in a statement yesterday, further describing the competitive bids as an "overwhelming response".

The bank said its preliminary assessment showed there was widespread participation by former RBTT shareholders, as well as other bidders.

Individual and small institutions received $18.6 million of the issue.

RBTT shareholders voted for the sale of the bank on March 26 at a special shareholders meeting at the Hilton Trinidad in St Ann's.

The Royal Bank of Canada acquired RBTT last month.

The Central Bank said previously it would continue sterilisation measures to ease the impact of rising inflation, and to absorb some of the $4.7 billion expected to enter the financial system following the US$2.2 billion takeover of RBTT by RBC, Canada's largest bank.