Sri Lanka bill yields edge lower

June 10, 2009 (LBO) – Sri Lanka’s Treasury bills yields edged marginally lower as the government sold 4.5 billion rupees of maturing bills to the market at Wednesday’s auction, the debt office said.

However selling down the T-bill stock to lock up foreign reserves also puts pressure on interest rates. The 3-month yield fell to 03 basis points to 12.01 percent, the 6-month yield fell 08bp to 13.05 percent and the 12-month yield fell 01bp to 13.39 percent.

The debt office, which is a unit the central bank, sold 1.0 billion rupees of 3-month bills, 1.5 billion rupees of 6-month bills and 2.0 billion rupees of 12-month bills.

A month ago about half the Treasury bills in issue was in central bank as more than two hundred billion rupees were printed a in a sterilized intervention exercises which worsened a balance of payments crisis.

But following the float of the rupee, the central bank has been selling down its stock of bills and collecting rupees.

On Tuesday’s the central bank’s T-bill stock fell to below 200 billion rupees to 199 billion rupees.