Flat Outlook

Sri Dharanee Performance Arts Theatre

Treasury rates remained flat at this weeks auction ahead of Central Banks monthly monetary policy announcement on Friday.
Market players are not expecting the bank to tinker with the short-term rates, though the Finance Minister recently announced that the government-borrowing programme would shoot up by Rs. 22 bn this year.rn

rnAfter nearly two-years of tough fiscal management, the Treasury is short of cash, as it is called up to subsidise key imports like wheat flour, milk food, petroleum and gas. The government has also bowed down to Union pressures to keep the Health and Transport sector alive.rn

rnAt this weeks auction, the Central Bank offered and accepted Rs. 3,527 mn worth of treasury bills, though it received bids for Rs. 9,970 mn.rn

rnThe weighted average yield for one-year paper was flat at 7.69 percent, six month notes at 7.66 percent and three-month treasuries at 7.70 percent.rn

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-LBO Newsdesk: LBOEmail@vanguardlanka.comrn