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Friday June 18th, 2021
Bonds & Forex

Sri Lanka sells Rs51.8bn in up to 20-year bonds, rates up

COLOMBO (EconomyNext) – Sri Lanka has sold 51.8 billion rupees of 7, 10 and 20-year bonds after calling bids for 30 billion rupees of bonds, the state debt office said, with an elevated auction-derived yield curve being established.

The debt office sold 18.24 billion rupees of 7-year bonds maturing on 01.07.2022 at weighted average yield of 9.17 percent. The cut off could be around 9.75 percent dealers say.

Before the auction the 7-year bond was quoted wide at 8.30/9.00 percent levels, up from 7.80/85 percent levels on February 24 before monetary policy was tightened two weeks ago.

A 10-year bond maturing on 15.03.2025 was sold at an average yield of 10.09 percent, raising 15.7 billion rupees. The cut-off could be around 10.25/50 percent.

A 20-year bond maturing on 15.03.2035 was sold at an average yield of 11.20 percent raising 17.89 billion rupees.

The cut-off could be in the range of around 11.25/50 percent, dealers say. 10 and 20 year bonds are illiquid. There is a large bond maturity on March 15. Sri Lanka’s new Central Bank Governor has said he will end the practice of making private placements in between auctions.

There have been concerns that the practice left room for manipulation.

Updated II

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