T-bill auction yields cross 10.0% mark across board

At the T-bill auction held yesterday, the Central Bank offered Rs.175.0 billion but accepted bids totalling Rs.161.0 billion, representing 92 percent of the total offer. The Central Bank fully subscribed to the three-month and six-month T-bills, while the one-year T-bill was significantly undersubscribed, with only Rs.989.0 million accepted. Meanwhile, the weighted average yields continued their upward trend, with the three-month bill seeing a substantial increase of 50bps to reach 10.49 percent.

The six-month bill also spiked by 52bps, at 10.76 percent. Notably, the one-year T-bill yield remained steady at 10.07 percent.

Meanwhile, the secondary market yield curve inched higher across the board, driven by lingering political uncertainty and cautious investor sentiment following the T-bill auction results. This led to a selling spree in the secondary bond market, although trading activity remained subdued. In the short end of the curve, 01.05.27 and 15.09.27 maturities were traded at 13.10 percent. On the mid-end, 15.02.28 bond traded within the 13.60 percent-13.80 percent range, while the 15.12.28 saw trades at 13.70 percent. Meanwhile, the 15.06.29 and 15.09.29 maturities were observed trading between 13.75 percent-14.00 percent. Additionally, the six-month short-term bills were trading in the range of 11.25 percent-11.00 percent. Consequently, yields have surpassed the 10.00 percent threshold across all maturities. Additionally, overnight liquidity reversed after nearly six months, turning negative and recording a deficit of Rs.-31.81 billion.