T-bill yields edge up as demand remains lacklustre

By First Capital Research

Yesterday, the weekly T-bill auction concluded with a modest increase in average weighted yields, while the accepted amount fell short of the initial offering amid tepid demand.

As a result, the secondary market’s yield curve experienced a slight upward shift, driven by selling pressure in response to these developments, all amidst relatively low trading activity.

At yesterday’s weekly T-bill auction, a total of Rs.78.0 billion was raised, which fell below the initial offering of Rs.140.0 billion, underscoring a lacklustre demand. The average weighted yields saw a modest uptick across all maturities, reflecting this lukewarm market sentiment. As a result, the yields for the three-month, six-month and 12-month T-bills rose to 7.59 percent, 7.91 percent and 8.31 percent, respectively. This represents an increase of 9bps for the three-month, 7bps for the six-month and 6bps for the 12-month maturities.

The secondary market’s yield curve echoed these trends, showing a slight upward tilt, despite subdued market activity. Consequently, on the short end, 15.10.2027 traded at 9.60 percent while the 01.07.2028 maturity traded at 10.05 percent. Moving ahead, 15.09.2029 traded at 10.50 percent and finally, the 15.12.2029 maturity traded at 10.55 percent. 

In the forex market the Sri Lankan rupee showcased an appreciation against the greenback, standing at Rs.296.2/US dollar in comparison to Rs.296.3/US dollar registered on the previous day. Meanwhile, overnight liquidity in the banking system rose to Rs.174.4 billion from Rs.171.9 billion seen previously.