Sri Lanka Treasuries yields up

Oct 05, 2011 (LBO) – Sri Lanka’s Treasuries yields rose across maturities with the 3-month yield moving 06 basis points to 7.21 percent with the state debt office only accepting bid for 76 percent of the offered volume. The 6-month yield rose 04 basis points to 7.27 percent and the 12-month yield rose 03 basis points to 7.34 percent.

The debt office which is a unit of the Central Bank offered 10 billion in bills for sale but said only 7.6 billion in bids had been accepted.

The state sold 4.0 billion in 3-month bills, 1.8 billion in 6-month bills and 1.7 billion rupees in 12-month bills.

Sri Lanka’s interest rates have edged up amid a defence of a dollar peg. Overnight repo rates rose above 7.45 percent Wednesday dealers said, which is higher than the 12-month Treasuries yield.

On Wednesday the monetary authority reactivated its long dormant reverse repo auction, facility and injected 1.2 billion rupees to the markets at 8.25 percent, below the standing facility rate of 8.50 percent.

Market players expect the cash rate to ease with the re-commencement of the reverse repo facility and participants who are short to bid lower at future auctions.

Meanwhile in bond markets, yields rose about 10 basis points, dealers said.