Mar 30, 2010 (LBO) – Sri Lanka short term Treasuries edged up slightly Wednesday but signs of further quantity easing emerged with only a part of a maturing tranche of bills being sold to real buyers. Three month bills edged up 7 basis points to 8.52 percent and the 6-month yield went up 05 basis points to 9.24 percent the government’s debt office, which is a unit of the Central Bank said.
The 12-month yield was flat at 9.47 percent with only 721 million in bills being sold.
The debt office said out of 10 billion rupees of maturing bills only 5,426 million rupees were sold to real buyers.
The monetary authority has been monetizing debt since late last year amid a government cashflow crunch sterilizing the liquidity at the other end. Twelve month inflation in Sri Lanka rose to 6.9 percent in February from 6.5 percent in January.