Public Debt Dept. to sell Treasuries worth Rs. 106 billion

by Sanath Nanayakkare

The Public Debt Department of the Central Bank of Sri Lanka will issue Treasury bonds worth of Rs. 50 billion through an auction today (13) and Treasury bills worth of Rs. 56 billion through another auction on July 14.

At the Treasury bill auction, the yield rates of 91 day and 182-day maturities will be decided below the level of 364 day maturity set at 5.25%.

The issue of Rs 50,000 million Treasury Bonds will be issued under two series: Rs. 27,500 million and Rs. 22,500 million.

The maximum yield rate for acceptance for Treasury bonds will be 6.40% and 8.06% respectively. Bids are invited from the Primary Dealers in Treasury Bonds on the basis of clean prices (exclusive of accrued interest from the date of last coupon payment to the date of settlement).

For both Treasury bonds and bills the minimum amount of a bid is Rupees five million (Rs.5,000,000) and multiples of Rupees one million (Rs.1,000,000) there onwards.

The general public can purchase Treasury bonds and bills from the following Primary Dealers or any other Licensed Commercial Banks: Acuity Securities Ltd. 2206297, NSB Fund Management Co. Ltd 2425010, Bank of Ceylon 2541938. People’s Bank 2206783, Capital Alliance Ltd 2317777, Sampath Bank PLC 2305842, Commercial Bank of Ceylon PLC 2332319, Seylan Bank PLC 2456340, First Capital Treasuries PLC 2639883, WealthTrust Securities Ltd 2675096.

Notably, the Central Bank has raised the ‘ceiling rate’ for 12-month Treasury bills by 02 basis points to 5.25 percent for this week’s auction where 56 billion rupees of bills will be offered.

The ceiling policy rate has operated as a de facto policy rate through which large volumes of government debt is monetised.

The Central Bank purchases government securities with printed money to ensure a lower yield rate, but the interest rate demand in the market for investing in government securities is higher.