Sri Lanka Treasuries yields edge up, more bids accepted at higher yields

ECONOMYNEXT – Sri Lanka’s Treasuries yields edged up at the weekly auction where more bids than offered at the longest term, where the cost was higher, data from the state debt office showed.

The three month yield where 2.0 billion rupees of bills were offered, the debt office accepted only 100 million rupees of bills, after offering 2.0 billion rupees of bills, keeping the yield at 7.50 percent, around the same levels as 7.51 on December 24, when bids were last accepted.

In 6-months, the debt office accepted only 4.0 billion rupees of bills, after offering 7.0 billion rupees, and the yield rose to 11 basis points from a week earlier to 8.13 percent.

In 12-months, the debt office offered 16 billion rupees of bills and accepted 20.8 billion rupees of bids at 8.52 percent, up 8 basis points from the last auction.

The debt office offered a total 25 billion rupees in bills at the auction, and accepted 25 billion rupees of bill, skewing acceptances towards the longer end of the yield curve where the cost to the budget was higher.

Sri Lanka no longer prints money to buy bills directly at the auction following public criticism of the activity they had doing for decades to generate monetary instability.

However the three month bill is now at the overnight call money rate, where the central bank’s domestic operations department is injecting money to keep rate below the ceiling policy rate. (Colombo/Jan08/2020)

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