Sri Lanka’s Treasury bill auction raised Rs 65.9 billion of an offered Rs 90 billion on Wednesday, with the shortfall concentrated entirely in the longer tenors.
Data from the Public Debt Management Office showed the three-month bill rose 1 basis point to 9.35%, while the six- and twelve-month bills were unchanged, EconomyNext reported.
| Tenor | Yield | Change | Offered | Sold |
|---|---|---|---|---|
| 3-month | 9.35% | +1 bp | Rs 40bn | Rs 53.91bn |
| 6-month | 9.44% | unchanged | Rs 30bn | Rs 6.58bn |
| 12-month | 9.95% | unchanged | Rs 20bn | Rs 5.4bn |
The shortfall is a maturity story, not a demand story
The headline — fewer bills sold — understates what happened. The three-month bill was oversubscribed against its own offer, selling Rs 53.91 billion against Rs 40 billion offered.
The gap opened further out. The six-month bill sold Rs 6.58 billion of Rs 30 billion offered, and the twelve-month bill Rs 5.4 billion of Rs 20 billion — together filling barely a quarter of what was put up.
So the auction did not lack buyers; it lacked buyers willing to lend for longer at the offered yields. The Public Debt Office took more at three months than it sought rather than raise longer rates to fill the book. The six- and twelve-month bills remain available on tap, which gives it a second route to the balance.
Secondary bond yields moved the other way
On the same day, yields in the secondary government bond market closed lower across the curve, EconomyNext reported separately:
- 15.09.2029 — 11.10/15%, from 11.10/25%
- 01.08.2030 — 11.45/50%, from 11.55/60%
- 01.02.2031 — 11.60/65%, from 11.67/73%
- 01.06.2033 — 12.20/30%, from 12.30/40%
- 15.10.2034 — 12.40/46%, from 12.50/55%
- 15.08.2036 — 12.70/75%, from 12.80/85%
The two moves are not contradictory, but they sit oddly together: dealers bid existing longer bonds up in price on Wednesday while declining to take much new longer-dated paper at auction. Neither filing offers an explanation, and none is asserted here.
The bond rally coincided with a 2.09% jump on the Colombo bourse, making Wednesday a broadly positive session across domestic asset markets.
Rupee slightly weaker
The rupee closed at 332.75/80 to the US dollar spot, from 332.65/70 on Tuesday — a marginal softening of about 10 cents.
EconomyNext notes the Central Bank’s figure that the rupee had depreciated 6.8% against the dollar on a year-to-date basis by the end of October, consistent with the depreciation data reported this week.
