The debt office which is a unit of the Central Bank said it offered 19 billion rupees in bills for roll-over and accepted 22.4 billion rupees in bills.
Analysts say rates that move at different auctions is generally good news for Sri Lanka's dollar peg. Most of Sri Lanka's most severe balance of payments crises have been preceded by weeks or months of flat bill yield down by large volumes of printed money.
The Central Bank has however been spooking the forex market with more transparent term auctions where money has been injected at far below market rates to banks over the past six weeks, arresting a strengthening of the rupee against the dollar.
In the past week the Central Bank held Treasury bill stock has started to climb, indicating that money is being injected into markets on a net basis.The bills stock which was around 206 billion rupees a last week rose to 212 billion rupees on November 20, with excess clearing balance in the banking system at another 7.8 billion rupees.
When money printed through Treasury bill purchases 'come up for redemption' in forex markets the Central Bank either has to either sell down its reserves to defend the peg or allow the rupee to weaken.