Central Bank of Sri Lanka (CBSL) on behalf of the Government of Sri Lanka (GoSL) will hold its largest ever Treasury (T) Bill auction in its 100 year old history by offering Rs 160 billion worth of T Bills by an auction to the market on Wednesday (8 May), data on the CBSL website of today’s (Thursday 27 April) showed.
The previous highest offering was a sum of Rs 125 billion made at an auction held last month (22 March). Meanwhile, the splits of Wednesday’s offering are Rs 80 billion worth of 91-day (three months) maturities, Rs 30 billion 182-day (six months) maturities and Rs 50 billion 364-day (one year) maturities respectively.
Issuing of T Bills and T Bonds is a popular way that GoSL raises money from the domestic market to meet its monetary needs. Sri Lanka first started issuing T Bills to the market in 1923 when it was a colony of the British and T Bonds, 14 years later in 1937.
Investments in T Bills and T Bonds are normally risk free, because in the event GoSL is unable to repay such debt, CBSL is mandated to print demand-pull inflationary money and repay such creditors. Money printing is the sole prerogative of the CBSL. CBSL is the steward of GoSL debt and also of the country’s foreign reserves.