Sri Lanka Treasuries yield up across maturities

ECONOMYNEXT – Sri Lanka’s Treasuries yields rose across maturities with the 3-month yield rising 14 basis points to 6.59 percent at Wednesday’s auction, data from the state debt office showed.

The 6-month yield rose 10 basis points to 6.93 percent and the 12-month yield rose 12 basis points to 7.42 percent.

The debt office which is a unit of the central bank sold only 7.0 billion rupees to real bidders and rejected other bids.

Most private bidders are asking around 8.0 percent or higher for one year bills.

An estimated 24 billion rupees of bills were maturing this week.

In the recent weeks the Central Bank had printed money to repay maturing bonds to keep interest rates down, putting synthetic printed money into the hands of savers and the banking system, driving domestic credit and imports up and hurting the currency and foreign reserves.

Analysts warn that if money is continued to be printed through Treasury bill markets, the rising interest rates will not arrest the sliding rupee.

On Wednesday the rupee strengthened to 143.95/144.05 from 144.25/35 to the US dollar.

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