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Sri Lanka sells Rs30bn in 12-month bills, yield up

ECONOMYNEXT – Sri Lanka’s central bank sold 30-billion rupees of 12-month bills at the weekly auction Tuesday with the average yield rising 14 basis points to 9.59 percent, data from the state debt office showed.

The central bank offered 8.0 billion rupees of 3-month bills, 9.0 billion rupees of 6-month bills and 13.0 billion rupees of 12-month bills.

The central bank accepted the entire offered quantity from 12-month bills.

Market analysts say it is not the best practice to accept higher than offered volumes, though it is now known to the market that the debt office will change maturities, though not by how much. Market already knows that up to 10 percnet more than the total could be accepted.

The taking up of the entire volume in 12-month was unexpected though there is now genuine demand for bills at these ratesm dealers said. Such uncertainty has a premium, analysts say.

There are market participants who are looking for different maturities. However there was a gap between the 6 and 12 month bills.

In the secondary market 12-month bills were quoted at 9.60/60 percent immediately after the auction.

Dealers said there is buying interest from investors who bid for 3 and 6 month bills and could not find any.

Bond yields moved about 10 basis points after the auction and were quoted wide after the auction, dealers said.

There was buying interest from foreign investors, in the morning, dealers said. In the spot market the rupee marginally strenthened to 154.88/90 percent.  (Colombo/Feb27/2018)





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