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Sri Lanka Treasuries drop at auction after rate cut

COLOMBO (EconomyNext) – Sri Lanka’s Treasuries yields dropped about 30 basis points across maturities at Wednesday’s auction, the state debt office said, following a 50 basis point cut in policy rates.

The 3-month yield average yield fell 30 basis points to 6.26 percent, the 6-month yield fell 30 basis points to 6.53 percent and the 12-month yield fell 30 basis points to 6.60 percent.

On February 24, shortly before a controversial 30-year bond auction panicked the market and a 5.0 percent window for excess liquidity was closed, the 3-month yield was 5.98 percent, the 6-month yield 6.09 percent and the 12-month yield 6.13 percent.

The debt office accepted 277 million rupees of 3-month bills, 7.83 billion in 6-month bills and 17.4 billion rupees in 12-month bills.

Sri Lanka’s opposition dominated parliament last week denied a request from the administration to raise the ceiling on outstanding Treasury bills which was nearing 850 billion rupees.

The administration can still sell more 12-month bills in place of maturing 3 or 6 months bills to create some space to issue new bills if necessary.

The debt office offered 24 billion rupees of bills at the auction and accepted 25.5 billion rupees in bids.

There were about 27 billion rupees of maturing bills this week.

Update I

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