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CBSL sells USD 100 mn worth development bonds

The central bank has successfully sold 100 million dollars of dollar-denominated Sri Lanka Development Bonds (SLDB) more than the rupee treasury yields.

Sri Lanka sold 73.33 million dollars of one-year one-month SLDB at an average yield of 6.57 percent fixed and 1 million dollars at 6.09 percent Weighted Average Margin over 6-month LIBOR.

It received 106.33 million dollars of bids. The bank also sold 19 million dollars of one-year eight-month bonds at 6.62 percent fixed.

The monetary authority also sold 6.12 million dollars worth of two-year nine months SLDB at 6.69 percent fixed while 0.55 million dollars worth of SLDBS were sold at 6.80 percent fixed.

Sri Lanka’s 12-month Treasury bill rate fell 359 basis points so far this year to its historic low of 4.86 percent at Wednesday’s auction, central bank data showed, amid the raft of measures to boost credit in a low-interest-rate environment to fuel the faltered economy grappled with the coronavirus pandemic.

The central bank on Monday said further discussions are ongoing to secure an additional USD 1 billion, under a Special Bilateral Swap Agreement with the Reserve Bank of India.

This was after the Central Bank of Sri Lanka (CBSL) and the Reserve Bank of India entered into a USD 400 million currency swap agreement on July 24.

The currency swap was made under the Framework on Currency Swap Arrangement for South Asian Association for Regional Cooperation (SAARC) countries for 2019 – 2022.

The move would provide short-term financing to the CBSL to meet the country’s balance of payment requirements.

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