Issue of Rs 74,500M maturities to repay Rs 72,521M maturities

By Paneetha Ameresekere | Published: 2:00 AM Oct 16 2021

By Paneetha Ameresekere 

Central Bank of Sri Lanka (CBSL) will hold its second largest weekly Treasury (T) Bill auction tomorrow (Monday, 18 October) an auction to issue T-Bills of face value (FV) Rs 74,500 million, to settle Rs 72,521 million worth of maturing FV T-Bills which will have to be settled by Friday (22 October) the latest, CBSL data released last Thursday (14 October) showed. 

The splits of T-Bills to be issued on Monday comprise 91 day maturities (Rs 20,000 million), 182 day maturities (Rs 22,000 million) and the benchmark 364 day maturities (Rs 32,500 million), while the splits of the T-Bill maturities to be settled by Friday comprise 91 day maturities (Rs 46,033 million), 182 day maturities (Rs 1,151 million) and 364 day maturities (Rs 25,337 million) respectively. 

But with CBSL’s and Government of Sri Lanka (GOSL’s) fixation of artificially maintaining a low interest rate regime despite inflationary pressure coupled with uncertainty, for the dual purpose of keeping GoSL’s borrowing costs low and to spur growth, what usually happens these days is that offers for the 182 and 364-day maturities are administratively allowed to be undersubscribed or rejected outright and the 91-day maturity, more often than not, not only oversubscribed, but allowed to be oversubscribed by over 100 per cent. . CBSL is the steward of GoSL debt. Issuing of T-Bills is a popular measure adopted by GoSL/CBSL to raise money to meet GoSL’s monetary commitments. Meanwhile, the largest T-Bill auction held to date is an auction for the issue of Rs 85,000 million worth of FV T-Bills held last Wednesday (13 October).

By Paneetha Ameresekere | Published: 2:00 AM Oct 16 2021

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