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Wednesday December 1st, 2021
Bonds & Forex

Sri Lanka Treasuries auction yields rise, one year up 51bp

ECONOMYNEXT – Sri Lanka’s Treasuries yields have risen across maturities with the one year bill rising 51 basis points to 7.01 percent, data from the state debt office shows.

The debt office sold 27.9 billion rupees of 3-month bills after offering 12.5 billion rupees.

The 3-month bill rose 32 basis points to 6.70 percent.

The 6-month yield rose 72 basis points to 6.99 percent with 520 million rupees being raised.

A total of 2,706 billion rupees of 3-month bills were sold at 7.01 percent, the highest volume of one year bills sold in weeks.

There had been no interest in 12-month bills for some time and bond markets were gradually winding down, as a currency crises worsened.

“The rise today was sharper than expected,” one dealer said. “But auctions should gradually start to get subscribed.”

A total of 31.1 billion rupees of bills were sold from a total 51.5 billion rupees offered.

It is not clear how much bills the central bank owns of the maturing bills.

There is no possibility of the central bank selling down its Treasury bills stock and re-building forex reserves as there is no functioning interbank foreign exchange market as yet.

Banks have also not raised their deposit rates to reflect the new Treasury bill yields. (Colombo/Sept29/2021)

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