Inflation ( CCPI)0.9% (May 2024)
GDP5.3% (1Q 2024)
Unemployment4.3% (4Q 2023)
3M T-Bill Rate9.39%
12M T-Bill Rate9.90%
2Y T-Bond Rate10.10%/ 10.20%
4Y T-Bond Rate11.10% / 11.25%
USD/LKR304/305
Reserves $5.4Bn (May 2024)
Cum. Trade Deficit $1,229 Mn (March 2024 cumulative)
Cum. Fiscal DeficitLKR 2,320 Bn (Dec 2023)

91Days T-bill rate shrink after T-Bill auction flooded with bids

Interest RatesJan 4, 2023
91Days T-bill rate shrink after T-Bill auction flooded with bids

The 91Days T-Bill rate fell by 63 basis points at the primary auction after CBSL restrict banks to access the SDF to park excess money. The rest of the maturities (182 days & 364 days) fell marginally by 18 & 9 basis points. A record amount of bids was received mainly targeting 91Days T-Bills.

The total bid received was LKR 260.6Bn out of which 68% were on 91days T-bills. However, CBSL managed to sell LKR 18Bn of 364Days T-Bills to the public, which is the highest since June last year.

CBSL is expected to restrict banks who are with excess cash to invest with CBSL on an overnight basis, allowing them to use the SDF only five times a month from the 16th of Jan. That leaves them just 13 effective days to invest with CBSL, and SDF, and the rest of the time they will have to lend it to other banks who are short of funds.

Given the current context, banks with excess money and who are risk averse would place those funds with CBSL for term Repo (if offered) or purchase outright T-bills with the lowest tenor (which is 91 days T-Bills).

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