WAYs continue to stay inverted at T Bond auction

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The Treasury (T) Bond yield curve stayed inverted for the third consecutive T Bond auction to Friday (10 June), an indication that investors expect pressure on yields in the short term to continue due to liquidity issues, before subsequently easing out.

The weighted average yields (WAYs) fetched by the 2025 and 2028 maturities at Friday’s auction were 20.30 and 20.19 per cent, down 208 and 167 basis points each, compared to the WAYs fetched  at the immediately preceding T Bond auction held 10 days ago on 30 May. WAYs fetched by the 2025 and 2028 maturities at the 30 May auction were 22.38 and 21.86 per cent, respectively.

Consequently, Central Bank of Sri Lanka (CBSL), the steward of Government of
Sri Lanka (GoSL) debt, sold the full complement of Rs 50,000 million worth of T Bonds on offer at Friday’s auction. The splits of the 2025 and 2028 maturities offered at Friday’s auction were Rs 20,000 million and Rs 30,000 million, respectively.

Paneetha Ameresekere