Sri lanka News – Sri Lanka’s 3-month Treasury bill yield rose 72 basis points to 12.92 percent at Wednesday’s auction data from the state debt office showed.
The 6-month yield rose 27 basis points to 12.25 percent.
The 12-month yield rose 28 basis points to 12.28 percent.
Out of an offer of 48 billion rupees of bills 47.6 billion was raised from 3 month bills.
The 12-month yield is lower than the 3-month bills.
It is not clear why 12-month bills are not accepted.
In the past several months 12-month bill yields have been much lower.
In all currency crises created by Sri Lanka’s intermediate regime central bank, authorities have rejected auction bids and then accepted them at higher rates as the crises worsened.
In an inflationary soft-pegged currency crisis in Sri Lanka interest rates continue to rise until a float is established and the currency is re-pegged.
Once domestic credit slows (and the currency is usually deflationary pegged) interest rates start to stabilize. (Colombo/Mar30/2022)