Sri Lanka’s Treasury bill yields jumped across all maturities at Tuesday’s primary auction, the first since the Central Bank raised its policy rate by 100 basis points to 8.75%, data from the Public Debt Management Office showed.
The Public Debt Management Office sold Rs. 95.55 billion of bills against an offered Rs. 140 billion. The three-month yield rose 18 basis points to 8.36%, with Rs. 71.24 billion sold of Rs. 65 billion offered. The six-month yield climbed 43 basis points to 8.68%, but only Rs. 14.4 billion was sold of Rs. 45 billion offered. The 12-month yield rose 34 basis points to 8.83%, with Rs. 9.9 billion accepted of Rs. 30 billion offered.
All three tenors remain available on tap. Settlement is due on 29 May.
The sharp move reverses the downward drift seen at recent auctions, when yields had eased and the Treasury raised Rs. 88 billion in mid-May. The rate decision also weighed on equities, with the Colombo Stock Exchange closing 0.85% lower on the same day, as higher risk-free returns reset the cost of borrowing across the economy.
