Flat Rates

Treasury bill yields remained flat on Wed. amidst speculation that that the Central Bank is unlikely to tinker with its short-term interest rates on Thu.
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The Central Bank has been following a soft rate stance amid reduced government borrowing following the February 2002 ceasefire.

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The bank has cancelled several government bond auctions lately and has also bought back treasury bills to inject liquidity into the system.rnrn

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On Monday, the bank cancelled a Rs. 3 bn two-year treasury bonds scheduled for Dec. 16, as it was ldblquote streamlining the borrowing program for December 2003.
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rnAtrnthis weeks T-bill auction, the bank bought back Rs. 1.15 bn of the Rs. 5.35 bnrnpaper on offer.rn

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Detailsrnof the auction are as follows:

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Maturity

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(Days)

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Amount

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Offered

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(Rs.Mn.)

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Bids

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Received

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(Rs.Mn.)

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Amount

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Accepted

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(Rs.Mn.)

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Weightedrn Average Yield

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Percentrn per annum

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Afterrn Tax

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Thisrn Week

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Lastrn Week

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3-months

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2,100

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5,307

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1,615

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7.34%

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7.34%

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6-months

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420

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603

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242

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7.30%

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7.30

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12-months

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1,680

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1,574

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343

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7.22%

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7.22%

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Total

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4,200

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7,484

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2,200

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7.32%

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7.29%

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-LBO Newsdesk: LBOEmail@vanguardlanka.comrn

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