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Sri Lanka Treasuries yields steady

ECONOMYNEXT – Sri Lanka Treasuries yield were flat at Tuesday’s auction with lower than offered 12 month bills being sold to keep down the yield at the longer end, data from the state debt office shows.

The debt office sold 9.8 billion rupees of 3-month bills after offering 5.0 billion rupees at a yield of 6.68 percent, down 01 basis point from a week earlier.

6.2 billion rupees of 6-month bills were sold after offering 2.5 billion rupees at an average yield of 6.80 percent down 02 basis points from a week earlier.

Only 4.4 billion rupees of 12-month bills were sold after offering 14 billion rupees, at an average yield of 6.93 percent, unchanged from a week earlier.

In money markets the central bank printed 15 billion rupees overnight to push excess liquidity as some banks increased borrowings from the 6.5 percent window, despite excess banks depositing over 100 billion in the central bank.

Banks may become short due to balances shifting to liquid banks or forex outflows which are defended. When liquidity is injected, forex reserves may have to be given for trading or debt settlements to stop a soft-peg from breaking. (Colombo/June02/2020)

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