Sri Lanka's treasury bills fall to historic low in recent auction

COLOMBO (News1st): Sri Lanka’s 12-month Treasury bill rate has fallen to 359 basis points so far this year to its historic low of 4.86 percent at Wednesday's auction, central bank data showed, amidst a raft of measures to boost credit in a low-interest-rate environment to fuel the faltered economy grappled with the coronavirus pandemic. The government debt department sold 12-month bills at 4.86 percent, 5 basis points below last weeks auction while the 6-month bills were sold at 4.69 percent 6 basis points below last week and 3-month bills were sold at 4.60 percent, down 5 basis points. The three month and six months treasury bill rates fell below the June national inflation rate which was recorded at 6.3 percent. Inflation, however, is historical and interest rates relate to the future. In January 3-months sold at 7.50 percent while 6-month bills were sold at 8.02 percent and 12-month were at 8.45 percent. This Wednesday, the central bank received 64.26 billion rupees worth bids in total but sold only 35.1 billion rupees. The auction will be settled on July 27.