Treasury Bill auction held on 20 August 2014

[SrirangaVeteran]

http://www.cbsl.gov.lk/pics_n_docs/latest_news/press_20140820e.pdf

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Sri Lanka Treasuries edge lower

Aug 20, 2014 (LBO) - Sri Lanka's Treasuries yield eased lower at Wednesday's auction without accepting any bid for the three month, data from the state debt office showed.

The 6-month yield fell 02 basis points to 6.28 percent and the 12-month yield fell 01 basis point to 6.30 percent.

The debt office said 556.00 million in 6-month bills and 3.84 billion in one year bills totaling 4.39 billion rupees were sold after offering 10.00 billion for rollover.
http://www.lankabusinessonline.com/news/sri-lanka-treasuries-edge-lower/1097559971

[slstockVeteran]

Don't think I have seen values like this for a decade atleast. Was a time it was around 7%.

On the upper side it was well over 20% in 2008.

http://www.cbsl.gov.lk/pics_n_docs/latest_news/press_20140820e.pdf

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Sri Lanka Treasuries edge lower

Aug 20, 2014 (LBO) - Sri Lanka's Treasuries yield eased lower at Wednesday's auction without accepting any bid for the three month, data from the state debt office showed.

The 6-month yield fell 02 basis points to 6.28 percent and the 12-month yield fell 01 basis point to 6.30 percent.

The debt office said 556.00 million in 6-month bills and 3.84 billion in one year bills totaling 4.39 billion rupees were sold after offering 10.00 billion for rollover.
http://www.lankabusinessonline.com/news/sri-lanka-treasuries-edge-lower/1097559971

[stocks hunterTop contributor]

@SLS,

That's why I have focused once again towards ESL the company which is at the top front to get this benefits. After that only it follows down the line.

[rainmaker]

It's a vicious cycle. High liquidity in the banking sector drives banks to put money in T bills (ie Central Bank).

This (eventually) results in low money supply which drives the interest rate up (the intebank rate when one bank needs cash to lend). ..... Just saying    

[slstockVeteran]

Time for some banks , companies with cash enhance their Equity portfolios ( calculated risk) without parking in low rate options.

It's a vicious cycle. High liquidity in the banking sector drives banks to put money in T bills (ie Central Bank).

 

[rainmaker]

Time for some banks , companies with cash  enhance their  Equity portfolios ( calculated risk)  without parking in low rate options.

It's a vicious cycle. High liquidity in the banking sector drives banks to put money in T bills (ie Central Bank).

 

I strongly believe that the liquidity in the banking sector has been created by the large dollar issues of the recent past. It is taking time to process through the system since the banks are risk averse.

Otherwise the new lending should result in an increase in imports, liquidity and eventually the interest rate

[stocks hunterTop contributor]

@Rain,

No that is not correct. Bank interests rates go up purely due to credit demand. still there's no credit demand in the country. So all the money that the public is depositing in banks/financial companies just laying at CBSL.

Repo/Reverse Repo rates, T bill ,T bond rates gives us an indication of the interest rate changes. For the time being - Until end of this year every thing is going down ward direction.

[slstockVeteran]

Rain, looking banks, credit growth seems dull upto June though. CB expects it to pick up in 2nd half of the year. Seems for some more months there is no threat of interest rate going up right? Actually the talk about putting it further down according to Cabral.

Time for some banks , companies with cash  enhance their  Equity portfolios ( calculated risk)  without parking in low rate options.

It's a vicious cycle. High liquidity in the banking sector drives banks to put money in T bills (ie Central Bank).

 

I strongly believe that the liquidity in the banking sector has been created by the large dollar issues of the recent past. It is taking time to process through the system since the banks are risk averse.

Otherwise the new lending should result in an increase in imports, liquidity and eventually the interest rate

[stocks hunterTop contributor]

Sri lanka's foreign reserves also plays a major role in governing mkt int rates.

At the movement we are at the history high levels. 2014 is quite safe year for every body.

http://www.lankabusinessonline.com/news/sri-lankas-foreign-reserves-at-us$8.9bn-in-april-2014/1865229795

http://www.tradingeconomics.com/sri-lanka/foreign-exchange-reserves

http://www.businessweek.com/videos/2014-08-14/sri-lankas-cabraal-on-economy-central-bank-policy

What is actually happening in banks now is converting high interest rate loans to present low rates. In real terms no growth is their. We could see only a very small growth in retail credit for the time being.