T-bill yields edge up; Rs.125bn raised

The Treasury bill yields edged up at yesterday’s auction from last week and the authorities raised little under Rs.125 billion, after offering Rs.130 billion in bills.
The three-month bill yield rose 42 basis points to Rs.17.97 percent and the Public Debt Department (PDD) of the Central Bank raised the full Rs.70 billion offered amount through this tenure.
The PDD raised Rs.30 billion via six-month bills after offering the same amount. The bill yield rose 16 basis points to 15.03 percent.
The one-year bill yields rose 12 basis points to 13.31 percent and the PDD raised Rs.24.79 billion via such bills, after offering Rs.30 billion. 

The Monetary Board of the Central Bank is expected to announce the sixth monetary policy review this morning. A majority of analysts expect a further reduction in policy rates.
Sri Lanka began its easing cycle in June, where 250 basis points were cut. It followed a 200-basis-point cut in the July monetary policy review.

The country’s inflation has decelerated significantly to single-digit levels from the peak of near 70 percent, last September.  The Central Bank’s preferred inflation band remains at 4-6 percent.