Sri Lanka bill yields fall across maturities at auction

ECONOMYNEXT- Yields at Sri Lanka’s Treasury Bill auction on Wednesday fell by more than 14 basis points across all maturities following a policy rate cut last week, data from the debt office showed.

The Public Debt Department sold three month bills at an average weighted yield of 7.37 percent on Wednesday, falling from 7.51 percent a week earlier.

Six month bills were sold at 7.99 percent, down from 8.15 percent a week earlier, while 12-month bills fell to 8.42 percent from 8.59 percent.

The central bank last Thursday cut the policy rates by 50 basis points. Bill rates at auctions had been gradually rising since November 22 before the rate cut.

In the secondary market, yields had fallen 20-30 basis points after the rate cut, but edged up on Wednesday following the auction.

At the bill auction, the Public Debt Office sold 30 billion rupees in securities, the full amount on offer, after receiving 91.61 billion rupees in bids.

Data showed the exact 4 billion rupees in three month bills on offer being sold.

The debt office sold 8.1 billion rupees in six month bills after offering 8 billion rupees, and sold 17.9 billion rupees in twelve month bills for the 18 billion rupees on offer.

The auction will be settled on February 07. (Colombo/Feb05/2020)