14 December 2023 12:38 am Views - 338
The Treasury bill yields continued to decline, albeit modestly at the weekly bill auction held yesterday, aimed at raising Rs.220 billion.
The Public Debt Department (PDD) of the Central Bank raised Rs.185 billion via T-bills just a week ago.
The PDD accepted Rs.215.9 billion by raising Rs.113.2 billion from three-month bills, Rs.94.6 billion from six-month bills and Rs.8.1 billion from 12-months bills, despite offering Rs.70 billion under the shortest tenure and Rs.75 billion each under six-month and 12-month bills.
The yields of the three-month bill came off eight basis points to settle at 14.59 percent while the six-month bill yield declined nine basis points to 14.29 percent. The 12-month bill yield shed five basis points to end at 12.83 percent.
Some might have anticipated significant declines in yields, following the International Monetary Fund’s (IMF) Executive Board’s approval for the release of the second tranche of US $ 337 million.
This approval, held back for over two months, came after the board sanctioned the debt agreements in-principle with the Official Creditor Committee and Export-Import
Bank of China.
Analysts have opined that the uncertainty surrounding the progress of the IMF programme and external debt restructuring has noticeably impeded the contraction of yields in recent months.
This deceleration comes after an initial rapid decline, following the announcement of the domestic debt restructuring, despite the substantial reductions in the key policy rates.
The Central Bank in its final monetary policy review for the year held in November said the totality of the policy rate cuts, completion of the domestic debt optimisation, conclusion of the first IMF programme review and other targeted measures should bring the yields down towards the policy rates from their currently high levels.
Currently, the key policy rates – standing deposit and lending facility rates – stand at 9.0 percent and 10.0 percent, respectively.