Oct 20, 2010 (LBO) – Sri Lanka’s Treasury bill yields edged up 05 basis points at Tuesday’s auction with the government also resuming the sale of 3-month bills at 7.02 percent, a statement from the debt office said. The government sold 6-month bills at 7.09 percent up 05 basis points, and 12-month bills at 7.22 percent, also up 05 basis points.
The debt office, which is a unit of the central bank said only 3.0 billion rupees of a maturing stock of 10 billion rupees was sold to real buyers.
Sri Lanka fiscal deficit rose in 2009 and interest rates fell without the government printing money as private sector credit shrank. But private loan growth is now up 12 percent needing higher interest rates to prevent inflation and balance credit with demand.