Yield pressure, like in the previous two weekly Treasury (T) Bill auctions, will also continue to bear upon Central Bank of Sri Lanka’s (CBSL) yet to be announced next week’s T Bill auction as well due to sustained uncertainty, coupled with high, double digit inflation.
In this connection, CBSL on behalf of the Government of Sri Lanka (GoSL) will have to repay maturing Treasury (T) Bills of known tenures totalling Rs 77.406 million to the market by next Friday (28 April). Their splits are Rs 67,884 million 91 day maturities, Rs 1,881 million 182 day maturities and Rs 7,641 million 364 day maturities, respectively. Howbeit, maturing T Bills held by the CBSL and also repayable by Friday are unknown as CBSL the steward of GoSL debt doesn’t disclose such figures.
Additionally another 182 day maturity, embedded in both 182 and 364 day maturities and totalling Rs 4,178 million in full, is also repayable to the market by next Friday. However, CBSL hasn’t given their separate splits, ie the value of the 182-day maturity separately and the value of the 364-day maturity embedded in the above full total of Rs 4,178 million, separately.
Further, another 91 day maturity, embedded in both 182 and 364 day maturities as well and totalling Rs 16,136 million in full, is also repayable to the market by next Friday. However, like as the above, CBSL hasn’t given their separate splits, ie the values of the 91-day, 182-day and the 364-day maturities embedded in the above full total of Rs 16,136 million, separately.
Generally such maturities are repaid by once more borrowing from the market by calling for new ‘T Bill auctions.’ Such auctions, held weekly, normally see their auction call advertised on the CBSL website on Fridays (today, 21 April), with such auctions held on Wednesdays (26 April) and with settlements, on next Fridays (28 April), respectively. But in this connection, CBSL on its website today (21 April) hasn’t called for such an auction at the time of writing.
Normally, investments in T Bills and T Bonds are risk free because in the event GoSL is unable to repay such debt, generally, CBSL is mandated print demand-pull inflationary money and repay such creditors. Money printing is the sold prerogative of the CBSL. CBSL is the steward of GoSL debt. Selling T Bills and T Bonds to the domestic market is a popular way GoSL raises money to meet its domestic needs.