Sri Lanka’s Public Debt Management Office sold the full Rs. 80 billion of Treasury bills it offered at Wednesday’s auction, but did so with a maturity mix sharply different from the one it put on the table, EconomyNext reported from PDMO data.
Yields moved in opposite directions at the short and long ends.
The auction in full
| Maturity | Yield | Change | Offered | Sold | Share of offer |
|---|---|---|---|---|---|
| 3-month | 9.03% | +7 bp | Rs. 35.00bn | Rs. 17.47bn | 50% |
| 6-month | 9.24% | −3 bp | Rs. 25.00bn | Rs. 28.63bn | 115% |
| 12-month | 9.77% | −4 bp | Rs. 20.00bn | Rs. 33.88bn | 169% |
| Total | Rs. 80.00bn | Rs. 79.98bn | 100% |
Hiru News reported the same figures, maturity by maturity, from the same PDMO release. The two accounts reconcile exactly.
What the composition shift means
The headline — full target raised — understates what happened underneath it.
The three-month bill was the largest tranche on offer at Rs. 35 billion and attracted accepted bids for barely half that. The twelve-month bill was the smallest on offer at Rs. 20 billion and was taken up at nearly 1.7 times the amount offered. The six-month sat between the two, oversubscribed by Rs. 3.63 billion.
The shortfall at the short end, Rs. 17.53 billion, is almost exactly offset by the excess at the six- and twelve-month maturities, Rs. 17.51 billion combined. The office met its number by letting the long end absorb what the short end would not take.
That pattern is consistent with the price signal: the only yield to rise was the three-month, by 7 basis points, while both longer maturities eased. Investors asked for more to hold three-month paper and less to hold twelve-month paper — the opposite of what a market bracing for near-term rate increases would do.
EconomyNext adds a detail Hiru does not: the three-month and six-month bills are available on tap, meaning the PDMO can continue selling them after the auction closes at the rates set there. Whether the undersold three-month tranche is topped up that way will not be clear until subsequent PDMO releases.
One characterisation that does not match the data
Hiru’s report closes by saying market reports indicated “a decrease in demand for longer-term Treasury bills” at the auction. The subscription figures in that same report point the other way: the twelve-month bill drew accepted bids worth 169 percent of its offer and its yield fell. The two verified accounts agree on every number; they differ only on how the demand is described, and the numbers are the firmer ground.
Context
The auction comes the same day the Colombo Stock Exchange extended its decline, with turnover falling below Rs. 1 billion — equities selling off while the government’s long-dated rupee paper was oversubscribed. Sri Lanka’s total public debt stood at Rs. 97,952 billion in the most recent PDMO reporting.
Not reported
Neither outlet gives the bid-to-cover ratio, the weighted average against the accepted rates, the total bids received as against bids accepted, or the settlement date. Neither says whether the PDMO deliberately capped acceptance at the three-month maturity rather than being unable to fill it — a distinction the raw figures cannot settle. No comment from the Central Bank or the PDMO on the composition shift has been reported.
