Pressure on Shorter Maturities Persists

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The distortion, where the weighted average yield (WAY) of the 91 day maturity continuing to be higher than that of the longer maturities was repeated at yesterday’s (14) weekly Treasury T-Bill auction as well, an indication that yield pressure persists in the short term backed by record high inflation.

Nonetheless, WAYs across the board made pyrrhic declines yesterday, aided by a guided auction, a pattern witnessed these days. Consequently, the WAYs of the 91,182 and the benchmark 364 day maturities fell by 18, 44 and 24 basis points (bps) each to  32.71, 31.82 and 30.26 per cent respectively.

Central Bank of Sri Lanka (CBSL), the steward of Government of Sri Lanka (GoSL) debt, sold 225 per cent (Rs 77,881 million) of the 91 day maturity compared to its original offer of Rs 35,000 million, 182 day, 2.09 per cent (Rs 523 million) vis-à-vis its original offer of Rs 25,000 million and the 364 day, 2.98 per cent (Rs 596 million) from a total of Rs 20,000 million originally offered at yesterday’s auction.

By Paneetha Ameresekere