T-bill yields continue to decline on debt talk progress

The Treasury bills continued to give up high yields reached last year, as they continued their weeks-long descent at the weekly bill auction held yesterday, where the Central Bank sold Rs.95 billion in bills. 

Compared to previous few weeks, the yield across the three tenures came down somewhat sharply with the most popular three-month bills shedding their yield the most. 

The shortest tenure bill gave up 107 basis points to settle at an average weighted yield of 30.08 percent taking the total decline in the yields in the first three weeks of the year alone to a substantial 256 basis points. 

Meanwhile, the six-month bills shed 230 basis points to end at 29.07 percent which brought the total yield contraction to 313 basis points so far this year. The benchmark 12-month bill slipped 11 basis points to 28.25 percent, bringing the total decline to 102 basis points in the first three weeks. 

The Central Bank offered Rs.95 billion in bills in the order of Rs.55 billion in three-month bills and Rs.20 billion each under six-month and 12-month bills. 

Acceptances also mirrored the order of the offered quantum. The yields are coming off their recent peaks on the prospects of the Board approval for the deal with the International Monetary Fund during the first quarter after the most recent comments from the government officials with regards to successful debt restructuring talks with India and China.