Bids of LKR 201.2 billion for LKR 80 billion on offer pushed 91-day, 184-day and 364-day rates up by 2 to 5 basis points.
Sri Lanka’s latest Treasury bill auction drew bids worth LKR 201.2 billion for the LKR 80 billion offered, a subscription of about 2.5 times, as yields on all three tenors edged higher.
At the September 30 auction, the 91-day bill was accepted at 9.25%, up 5 basis points. The 184-day bill rose 4 basis points to 9.41%, and the 364-day bill gained 2 basis points to 9.95%. The full LKR 80 billion offered in the first phase was accepted.
A second phase held on October 1 received a further LKR 20.9 billion in bids, of which LKR 8 billion was accepted. The rates shown for the second phase matched those of the first. Across both phases, accepted amounts totalled LKR 88 billion against bids of about LKR 222.1 billion. Settlement for both phases is on October 2.
The increases were small, and the 364-day rate moved the least. They came the day after the Central Bank held its Overnight Policy Rate at 8.75%.
Demand for short-dated government paper remained strong, and the market also has maturities ahead. Treasury bills worth LKR 80.9 billion fall due in the week ending October 9. Treasury bills make up about LKR 2.36 trillion of the LKR 18.85 trillion in outstanding government securities.
Key Numbers
| Indicator | Figure |
|---|---|
| 91-day bill rate | 9.25% (+5 bps) |
| 184-day bill rate | 9.41% (+4 bps) |
| 364-day bill rate | 9.95% (+2 bps) |
| Phase One: offered / bids / accepted | LKR 80 Bn / LKR 201.2 Bn / LKR 80 Bn |
| Phase Two: bids / accepted | LKR 20.9 Bn / LKR 8 Bn |
| Phase One bid cover (approx.) | 2.5x |
| Bills maturing, week ending Oct 9 | LKR 80.9 Bn |
| Overnight Policy Rate | 8.75% (unchanged) |
Business Impact
Treasury bill rates are a benchmark for short-term borrowing costs across the economy. Banks, treasury teams and companies with floating-rate or short-term facilities track them closely. A rise of a few basis points changes little on its own, but the strong demand shows that investors, mainly banks and institutions, still want short-term government paper at current yields. Businesses with borrowing linked to bill rates should watch whether the upward drift continues at the next auctions.
This article reports market data and does not constitute investment advice.
Source Attribution: Central Bank of Sri Lanka statistics and publicly available market information.