CB raises Rs.155bn at first bill auction for 2024 where only 3-month yield budged

The Central Bank raised Rs.155.2 billion after offering Rs.160.0 billion at the first Treasury bill auction held in the new year, where the yields showed continued stubbornness from coming down, except in the case of the three-month tenure.
The Public Debt Department of the Central Bank called for subscription for Rs.40.0 billion in three-month bills, Rs.70.0 billion in six-month bills and Rs.50.0 billion in 12-month bills, adding up to another one of those outsize bill auctions mostly seen in recent weeks.
However, as seen in typical bill auctions in the recent past, they accepted more than what they offered under the three and six-month bills, at Rs.64.9 billion and Rs.88.6 billion each, while taking in only a fraction of just Rs.1,571.0 million under the one-year bills.
The yield of the three-month bill slid six basis points to 14.45 percent while the yields of the six-month and 12-month bills remained unchanged from last week levels, at 14.16 percent and 12.93 percent. Further to the T-bill auction held on January 3, Rs.6,200 million was raised at phase II, under the one-year bills, at the weighted average yield rate of 12.93 percent determined at the auction. The Central Bank recently said it could now accept the amounts at the auctions at yields it deems acceptable for it, as it no longer needs to solely depend on the market for its regular funding needs because cash flows have now improved since raising taxes.
Central Bank Governor Dr. Nandalal Weerasinghe recently disclosed that the government is now operating with a cash buffer, giving them more flexibility over the amounts they raise from the market.   
As of late, the Central Bank has been offering large amounts of bills through its auctions, perhaps expecting the yields to drop further from their current levels, so that it could reissue them when they come due at lower yields.
After cutting rates by 100 basis points in November last year, the Central Bank said it would leave the key rates unchanged for a few months, for both yields and the rates to fall towards the level of the policy rates, as it sees more room for policy transmission.
Currently, the policy rates are at 9.0 and 10.0 percent levels.