182-day maturity fully subscribed after 15 months

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Central Bank of Sri Lanka (CBSL), for the first time after more than 15 months, accepted at least 100 per cent or more of the 182-day maturity at yesterday’s weekly Treasury (T) Bill auction due to falling yields, after CBSL Governor Dr. Nandalal Weerasinghe recently threatened that CBSL would buy T Bills to cap rising yield pressure.

Consequently, CBSL, the steward of GoSL debt, sold 109.68 per cent (Rs 25,227 million) of the 182-day maturity compared to its original offer of Rs 23,000 million at yesterday’s auction. The 182-day maturity fetched a weighted average yield (WAY) of 23.60 per cent at yesterday’s auction, down 62 basis points (bps) Week-on-Week (WoW). The last time the 182-day maturity was fully subscribed was at the 20 January 2021 auction, where CBSL sold the full complement of Rs 23,000 million of that maturity offered to the market then.

Meanwhile, the WAY of the benchmark 364-day maturity declined by 55 bps to 23.75 per cent and the 91-day maturity by 90 bps to 22.75 per cent at yesterday’s auction. Yesterday was the second consecutive week that the 364-day maturity was subscribed by over 100 per cent (102.87 per cent), where, CBSL sold Rs 20,574 million of this maturity compared to its original offer of Rs 20,000 million.

However, to cap rate pressure, CBSL sold only 93 per cent of the 91-day maturity yesterday, that is, Rs 37,199 million, compared to its original offer of Rs 40,000 million. Nonetheless, the WAY of the 91-day maturity declined by 90 bps WoW to 22.75 per cent yesterday.

Subsequently, CBSL sold the total parcel of Rs 83,000 million offered yesterday, the second consecutive week it was able to sell the total parcel offered at these weekly auctions, complemented by falling yields across the board.

By Paneetha Ameresekere