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Thursday May 6th, 2021
Bonds & Forex

Sri Lanka sells most of Treasuries offered, yields marginally up

ECONOMYNEXT – Sri Lanka has sold most of Treasuries offered with yields largely steady, after failing to sell all government securities at several auctions which saw the central bank’s Treasuries stock rise to 566 billion rupees from 515 billion.

Sri Lanka’s 1970s ‘closed economy’ and its forex shortages also came due to similar practices, critics have said.

Government securities auctions (as a well as a ‘bills only’ policy for open market operations that was jettisoned during the last regime) were introduced by then – Governor A S Jayewardene, to end the 1980s severe monetary instability.

The Ranil-Sirisena regime saw two currency crises in close succession and a collapse of growth.

The debt office offered a total of 39.3 billion rupees of bills and sold 37.4 billion rupees of bills with only slight changes in yields.

2.5 billion rupees of 3-month bills were offered and 5.0 billion was sold at an average yield of 4.64 percent, up from 4.61 percent a week earlier.

13.3 billion rupees of 6-month bills were offered and 12.05 billion was sold at an average yield of 4.76 percent, up from 4.73 percent a week earlier.

23.5 billion rupees of 12-month bills were offered and 20.3 billion was sold at an average yield of 5.0 percent, slightly up from 4.98 percent a week earlier.

Last week the central bank failed to sell most of the auction and its Treasury bills stock jumped to 566 billion rupees from 540 billion a week earlier. (Colombo/Nov25/2020)

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