ECONOMYNEXT – Sri Lanka’s 3-month Treasury bill yield rose 89 basis points to 8.04 percent at Wednesday auction data from the state debt office showed, as interest rates continued to catch up with the budget deficit.
The debt office offered 85 billion rupees of bills and accepted 50.4 billion rupees from the market.
It is not clear how much of the bills are already with the central bank.
Bids for 6 and 12 month bills were rejected.
According to market sentiment one year bills are viewed at rates higher than 8.50 percent.
Sri Lanka’s one year bill yields were slowly climbing up to around 8.58 percent in the first quarter of 2020 after the tax cuts in December 2019 when rates were cut and unprecedented money printing began.