Sri Lanka sells 3-month bill auction yield down 21bp

ECONOMYNEXT – Sri Lanka’s 3-month Treasury bill yield fell 21 basis points to 7.77 percent at Tuesday’s auction with all offered 53 billion rupees of securities sold, data from the state debt office showed.

The debt office sold 46.9 billion rupees of 3-month bills.

5.75 billion rupees of 6-month bills were sold at 8.03 percent down from 8.12 percent.

300 million rupees of 12-month bills were sold at 8.17 percent, down 02 basis points.

Last week also the central bank sold all offered bills including their own taking the outright bill stock down to 1,447 billion rupees from 1,460 billion rupees.

However without a working foreign exchange market the central bank is unable to sell down bills on a net basis.

The central bank is also injecting money overnight at 6.0 percent and also withdrawing liquidity in a sterilization trap.

The gap between the overnight rate of 6.0 percent and the 3-month yield is now 177 basis points.

On November 16, 315 billion rupees was injected through overnight window and 40 billion rupees were withdrawn . More money had also been withdrawn through term auctions. (Colombo/Nov16/2021)

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