Rs 74B maturing T Bills due for repayment

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Central Bank of Sri Lanka (CBSL) on behalf of the Government of Sri Lanka (GoSL) will have to repay maturing Treasury Bills of Rs 74,352 million in value to the market by the coming Friday (6 August).

Their splits are Rs 74,069 million worth of maturing 91 day T Bills and Rs 2,413 million worth of maturing 364 day T Bills, respectively. There are however no maturing 182 day worth of T Bills up for repayment by the coming Friday. Maturing T Bills held by CBSL and which are also due for repayment by the coming Friday are unknown as CBSL, the steward of GoSL debt, doesn’t make privy such information.

Generally, CBSL repays such debt by once more borrowing from the market by reissuing T Bills to the same. Such issuances/reissuances are normally made in the coming Wednesday’s (3 August) T Bill auction with announcement of such issuances/reissuances made on CBSL’s website on Friday (29 July). Settlement of such T Bill issuances are also normally done in the coming Friday (5 August), superimposing with the above maturing T Bill repayments due.  However, at the time of writing CBSL hasn’t made mention of such new issuances on their website. Issuances of T Bills are usually held once weekly.

Issuing of T Bills and T Bonds is a popular way that GoSL raises money from the domestic market to meet its needs. Investments in T Bonds and T Bills are risk free, because, in the event GoSL is unable to honour such debt, CBSL is mandated to print demand pull inflationary money and repay such creditors. Money printing is the sole, mandated prerogative of CBSL.

By Paneetha Ameresekere