Sri Lanka’s Treasury bill yields rose across all maturities at Wednesday’s primary auction, with the Public Debt Management Office (PDMO) selling Rs. 111.1 billion of bills of Rs. 140 billion offered, EconomyNext reported.
The three-month yield rose 48 basis points to 9.84%. The PDMO offered Rs. 65 billion of three-month bills and accepted Rs. 55.2 billion. The six-month yield climbed 33 basis points to 10.01%, with Rs. 46.31 billion accepted of Rs. 55 billion offered. The 12-month yield rose 19 basis points to 10.02%, with only Rs. 9.64 billion sold of Rs. 20 billion offered — the weakest take-up rate at the long end.
All three bills are available on tap. Settlement is scheduled for June 5.
The auction follows continued pressure on the rupee, which weakened to 333.00/335.50 in interbank spot trading on the same day, with the CBSL telegraphic transfer buying rate at Rs. 328. Bond yields on benchmark government securities also closed higher, with the 2030 bond up to 12.15/25% from 12.05/15% and the 2035 bond up to 13.15/25% from 13.05/15%.
The yield jump extends a steady upward drift since the May 26 auction that followed the Central Bank’s 100-basis-point policy rate hike to 8.75%, when the 12-month rate stood at 8.83%. The 12-month rate is now 119 basis points higher than that post-hike level, reflecting tighter rupee liquidity, continued FX pressure and front-loaded Treasury borrowing as the government approaches the IMF 6th and 7th tranche disbursement window worth $695 million.
