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Sri Lanka sells only 14-pct of bill auction amid re-structure concerns

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ECONOMYNEXT – Sri Lanka has sold only 10.27 billion rupees of Treasury bills in a 75 billion rupee auction with most of the money taken from 3-month bills, with yields unchanged, data from the state debt office showed.

Market participants say buyers are bidding at high rates amid lack of clarity on a possible domestic bond re-structure.

The debt office sold 5.8 billion rupees of 3-month bills after offering 30 billion at 32.89 percent, unchanged from a week earlier.

Only 1.9 billion rupees of 6-month bills were sold after offering 25 billion at 31.28 percent.

Only 2.6 billion rupees were sold in 12 month bills after offering 20 billion rupees at 30.5 percent.

The cut-off for the 3-month bill where most of the real demand has come is estimated around 34 percent.

Last week the cut off reached around 37 percent, according to estimates amid re-structuring

Central Bank Governor Nandalal Weerasinghe has allowed rates to go move up and there is already a steep correction in outflows.

Sri Lanka however has to be able to finance the deficit through bonds. Before re-structuring concerns spooked investors money was flowing in to the market around 25 percent. (Colombo/Sep 07/2022)

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