WAYs Rise at T Bill Auction

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Weighted average yields (WAYs) across all three tenures at yesterday’s weekly Treasury T Bill auction rose by 99 basis points (bps) each week-on-week (WoW) to 29.44, 28.97, and 29.14 per cent in respect of the 91,182, and 364-day maturities, as Central Bank of Sri Lanka (CBSL) partially lifted yield controls after a lapse of four weeks in an attempt to rein in inflation which is at a record high of 58.9 per cent.

Yesterday, the Monetary Board was due to meet to decide on CBSL’s new policy rates, which decision will be made today.

Consequently,CBSL sold 166.67 per cent (Rs 50,004 million), 40.75 per cent (Rs 6,113 million) and 25.89 per cent (Rs 3,883 million) compared to the original offers of Rs 30,000 million for the 91-day maturities and Rs 15,000 million each made for the 182 and 364-day maturities made at this auction, resulting in CBSL selling the total of Rs 60,000 million worth of T Bills offered to the market yesterday.  

Meanwhile,CBSL on behalf of the Government of Sri Lanka (GoSL) will have to repay one of the lowest T Bill maturities due to the market tomorrow (Friday 19 August), a total sum of a mere Rs 7,618 million only.

Their splits comprise Rs 6,416 million 91-day maturities and Rs 1,265 million 182-day maturities only. There are no 364-day maturities repayable to the market by tomorrow. Meanwhile, such repayments also due to the CBSL by tomorrow are however unknown, as CBSL doesn’t make privy such data.

Issuing of T Bills and T Bonds is a popular way that GoSL raises money domestically to meet its monetary needs.T Bill auctions are generally held weekly.

By Paneetha Ameresekere