Sri Lankan bill yields move up

Dec 16, 2009 (LBO) – Sri Lankan Treasury bill yields edged up across maturities, at Wednesday’s auction, the government’s debt office said, despite only a part of the bids being accepted. The 3-month yield rose 09 basis points to 7.60 percent, the 6-month yield rose 09 basis points to 8.59 percent and the 12-month yield rose 06 basis points to 9.32 percent.

The central bank said out of 7.0 billion rupees of maturing debt, only 5.4 billion rupees was accepted from the market.

The stock of treasury bills held by the Central Bank has now climbed to 24.0 billion rupees, and excess liquidity is high.

Fiscal discipline has weakened ahead of presidential poll in January and in November inflation moved up to 2.8 percent from 1.4 percent a month earlier.

But credit growth is still weak.