Interest Rates in Treasury Bills Decline Further In Line with the Easing of the Monetary Policy by the Central Bank of Sri Lanka

6th November 2009, www.dailymirror.lk

The yield rates on Treasury Bills declined further at the primary auction held yesterday. The yield rate on Treasury bills with a maturity of 91 days declined by 36 basis points to 8.14 per cent, the lowest since May 2005. This trend was reflected in the yield rates of Treasury Bills with the maturities of 182 days and 364 days as well.

With this reduction, the primary market yield rates of Treasury Bills have declined by 906 - 938 basis points during the past 12 month period. The secondary market Treasury Bill yield rates also continued on its decelerating path during this period.

In the meantime the primary and secondary market yield rates for Treasury Bonds also followed the same trend and declined by 843 - 1088 basis points during the past 12 month period while the extension of the yield curve upto the 6 year horizon was also witnessed during this period with the prudent public debt management strategies.

The reduction in yield rates observed during the recent past is in line with the gradual easing of the monetary policy stance by the Central Bank of Sri Lanka, increased foreign investor participation in the Government securities market, prevailing liquidity position in the market and positive view of the market on the deceleration of inflation rate.