CBSL besieged by yield pressure at T bond auction

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Central Bank of Sri Lanka (CBSL) capped yield pressure on the shorter tenure 2025 maturity by selling only 11.99 per cent (Rs 3,704 million) of the original offers of Rs 30,880 million received at yesterday’s Treasury T Bond auction.

Consequently the 2025 maturity fetched a weighted average yield (WAY) of 29.16 per cent yesterday, unchanged over the WAY fetched at the previous T Bond auction which was on 30 August. The value of the parcel offered at this auction was Rs 30,000 million.

 However, with regard to the other parcel offered, namely the 2032 maturity, the totality of that parcel offered, Rs 45 billion, was sold at a WAY of 29.96 per cent to the market at yesterday’s auction. The 2032 maturity wasn’t offered at the 30 August auction. The totality of offers made to the market yesterday by the CBSL at the T Bond auction was Rs 75 billion.

Today, CBSL will be holding a Rs 75 billion T Bill auction, the splits of which are Rs 35 billion 91 day maturities, Rs 25 billion 182 day maturities and Rs 20 billion 364 day maturities, respectively.

Additionally, CBSL on behalf of the Government of Sri Lanka (GoSL) will have to repay maturing T Bills totalling Rs 67,393 million to the market by Friday (16 September). Settlement of today’s T Bill auction is also on Friday.

The splits of the Rs 67,393 million maturities are Rs 67,087 million worth of 91 day maturities, Rs 20 million worth 182 day maturities and Rs 286 million worth 364 day maturities, respectively. Such repayable maturities, due also to the CBSL are however unknown as CBSL doesn’t make privy such details. CBSL is the steward of GoSL debt.

By Paneetha Ameresekere