Sri Lanka Treasuries yields plunge at auction after rate cut

ECONOMYNEXT – Sri Lanka’s Treasuries yields plunged across maturities at Wednesday’s auction with the 12-month yield falling 41 basis points to 4.91 percent after a 100 basis point rate cut last week, data from the state debt office showed.

The 6-month yield fell 43 basis points to 4.75 percent, with 4.0 billion rupees of bonds sold, after offering 5.0 billion rupees.

The 3-month yield also fell 43 basis points with 4.0 billion rupees in bills sold after offering 5.0 billion rupees.

The debt office sold 21.5 billion rupees of 12-month bills after offering 19.5 billion rupees of bills taking the total to 29.5 billion rupees.

In the past three weeks, the central bank has sold down some of its stock of bills to mop up some excess liquidity which triggered a currency collapse and import controls earlier in the year. (Colombo/July15/2020)