Rs 35B T Bonds to be sold on wednesday


 Central Bank of Sri Lanka (CBSL) on behalf of the Government of Sri Lanka (GoSL) will be issuing Rs 35,000 million worth of Treasury (T) Bonds to the market on Wednesday, the splits of which are Rs 15,000 million worth of 2025 maturities and Rs 20,000 million worth of 2029 maturities, respectively.

In the immediately preceding T Bond auction, held on 28 July, CBSL sold Rs 50,000 million worth of T Bonds comprising 2025 maturities of Rs 20,000 million in value and 2031 maturities of Rs 30,000 million, respectively.

At the 28 July auction, the weighted average yield (WAY) of the 2025 maturing T Bond rose by 27 basis points (bps) to 28.45 per cent, compared to a WAY of 28.18 per cent fetched at the 11 July auction. However, the other maturity offered at  the 28 July auction, the 2031 maturity, fetched a WAY of 23.91 per cent, less than the WAY of 28.45 per cent fetched for the 2025 maturity,  indicating that pressure on yields are on the “shorter” term maturities. This pressure on shorter term maturities is due to record high inflation coupled with sustained political uncertainty among others. High inflation is an impetus for higher yields to counter inflationary pressure.

By Paneetha Ameresekere