T-Bill yield rates see mixed reaction in primary and secondary markets

Treasury Bill primary market yield rates increased marginally during last week compared to the previous week. However, a downward movement was observed in the secondary market yield rates of T-Bills and T-Bonds, according to the Weekly Economic Indicators report of the Central Bank of Sri Lanka.

The outstanding stock of T-Bills and T-Bonds held by foreigners decreased by 2.52 per cent in rupee terms during the reporting week compared to the week before, the report said. Further, the weekly T-Bill auction was oversubscribed by 1.57 times during the reporting week. The total volume of secondary market transactions in T-Bills and T-Bonds has decreased by 12.6 per cent in the reporting week compared to the week before.

It further said:

“During the year up to 25th August 2023, the Sri Lanka rupee appreciated against the US dollar by 12.1 per cent. Given the cross currency exchange rate movements, the Sri Lanka rupee appreciated against the Japanese yen by 23.4 per cent, the pound sterling by 7.3 percent, the Euro by 10.7 per cent and the Indian rupee by 11.8 per cent during this period.”

“Weekly Average Weighted Prime Lending Rate (AWPR) for the week ending 25th August 2023 decreased by 43 bps to 15.59 per cent compared to the previous week.”

“The reserve money decreased compared to the previous week mainly due to the decrease in the deposits held by the commercial banks with the Central Bank.”

“The total outstanding market liquidity was a deficit of Rs. 23.553 bn by 25th August 2023, compared to a deficit of Rs. 62.913 bn by the end of last week.”