Marching Up

Treasury bill yields continued to tick upwards with three-month paper gaining by seven basis points at Tuesdays auction, the Central Bank said Tuesday.
The bank said it accepted and offered bids for Rs. 7.288 bn, despite receiving bids worth Rs. 12.507 bn.rn

rnThree-month gilts rose to 7.52 percent, while six months paper was flat at 7.61 percent.rn

rnOne-year paper went up by two basis points to 7.61 percent.rn

rnTreasury yields have been climbing steadily due to the ongoing political infighting between President Chandrika Kumaratunga and Prime Minister Ranil Wickremasinghe.rn

rnKumaratungas recent alliance with the JVP has also fuelled speculations that a snap poll is imminent to resolve the political deadlock.rn

rnThe daily newspapers are speculating that parliament will be dissolved by February 8, though neither camp is willing to scotch the rumours.rn

rnIn the run up to a possible poll, the government last week announced a two billion rupee relief package by cutting customs duties on selected products to reduce costs that have shot up due to high world prices and an ongoing drought.rn

rnFinance Minister K N Choksy said the Treasury was paying the subsidy through proceeds of unutilised state assets. rn


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