Sri Lanka Treasuries yields soar at auction, bonds spike

ECONOMYNEXT – Sri Lanka’s Treasuries yields rose across maturities at Wednesday’s auction with the 12-month yield rising 25 basis points to 6.97 percent, the state debt office said, sending secondary market bond yields higher.

The 3-month yield rose 17 basis points to 6.87 percent and the 6-month yield rose 21 basis points to 6.66 percent.

The debt office sold 8.5 billion rupees of 3-month bills, 5.39 billion rupees of 6-mont bills and 3.4 billion rupees of 12-month bills totalling 17.34 billion rupees.

Analysts say rising rates are essential to minimise a fall in the currency after several months of loose monetary policy by the Central Bank involving money printing and rate cuts despite a deterioration of the budget.

After the auction most bond were quoted wide, dealer said.

But a more liquid 01.08.2021 bond was quoted at 9.45/55 percent up from yesterday’s 9.05/20 percent. A 01.09.2023 bond was quoted at 9.90/95 percent up from yesterday’s closing at 9.75/78 percent. (Colombo/Aug26/2015)

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