COLOMBO, July 12 (Reuters) - Sri Lanka’s central bank expects a further fall in T-bill yields due to less pressure from government borrowing and a proposed new auction system, Deputy Governor Nandalal Weerasinghe told Reuters on Wednesday.
The yield on the benchmark 364-day T-bill has dropped 66 basis points since April 21, from a near four-year high of 11.11 percent, despite the central bank raising its key policy rates by 25 basis points in March.
Yields on 182-day and 91-day T-bills have also fallen 53 bps and 13 bps respectively in the same period.
“We expect it will continue because there is no pressure in terms of maturity and also the government has a buffer in terms of external financing,” Weerasinghe told Reuters.
The central bank also expects to introduce a new auction system for government securities, which will lower the yields, he said. (Reporting by Shihar Aneez; Editing by Sherry Jacob-Phillips)