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Sri Lanka sells Rs45bn in Treasuries, short tenors edge up

ECONOMYNEXT – Sri Lanka has sold 45 billion rupees of Treasury bills at an auction Wednesday, with more bids being accepted in the short end at marginally higher yields, data from the state debt office showed.

The debt office offered 7.5 billion rupees of 3-month bills and sold 17,384 billion rupees at 4.95 percent, up 05 basis points from a week earlier.

In 6-month bills 12.5 billion rupees were offered and 27.5 billion rupees worth were sold at 5.03 percent, up 04 basis points

In 12-mont bills 25 billion rupees were offered and only 100 million was sold at 5.10 percent, up 01 basis point from last week.

Before the ‘auction’ a 5.10 percent price control was announced, up 01 basis point.

The central bank had earlier placed price controls on 3 and 6 months bills, which were lifted and they had been converging towards the 12-month yield amid wholesale rejections of bids.

Over the past year large volumes of bills and bonds had been monetized. However at the last bond auctions, there may have been a sell-down, analysts who watch the central bank say.

Failed bill auctions, monetized debt and excess liquidity had been associated with currency pressure, closed economies and import substitution cronyism in the past and present. (Colombo/Mar03/2021)

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