12-month T-bill yields ease; 3-month, 6-month yields remain sticky 

The 12-month treasury bill yield continued to come off its highs while the yields of the rest of the two tenors—3-month and 6-month— remained steady at the weekly primary bill auction held yesterday, which was advanced by a day due to today being a poya day. 
In a departure from last week, the auctions this week saw the Public Debt Department failing to sell the entirety of the bills offered, falling short of about 11 percent of what was sold. 

The auction saw the Central Bank offering Rs.85.0 billion in bills across the three maturities—Rs.40.0 billion in 3-month bills, Rs.25.0 billion in 6-month bills and Rs.20.0 billion in 12-month bills. 
As seen in the recent past, the bulk or Rs.65.5 billion was accepted under the 3-month bills at 32.91 percent yield, unchanged from last week. 
Meanwhile, Rs.6.9 billion was accepted under 6-month bills where the yield remained unchanged at 32.27 percent from last week. 

The Central Bank accepted Rs.3.1 billion under the 12-month bills of which the yield eased by 13 basis points from last week to 29.33 percent. 
The yields started falling somewhat at a faster pace since November 16 when the Central Bank said they want to see some downward adjustment in the short term rates and deposit rates, as they deem the current rates are excessive to where the policy rates stand. 

The Monetary Board a fortnight ago said they would be compelled to take some administrative measures by way of caps on deposit and lending rates unless the rates adjust themselves in the near to short term. 
While the yields have responded somewhat, it remains to be seen if they have responded up to the extent the Monetary Board had wanted to see as they appeared to have paused at the current levels after easing for two weeks. 

The concerns of a potential restructuring of domestic debt and a possible delay in the receipt of the International Monetary Fund bailout package, may still be keeping the investors and dealers on the edge.