MONETABRIEF – Sri Lanka's Treasury bill yields fell across maturities at Wednesday's auction with the 120 billion rupees of offered bills sold in the same volume in each tenor, data from the state debt office showed.
The 3-month yield fell to 10.13 percent from 10.21 percent, with all 55 billion rupees sold.
The 6-month yield fell to 10.27 percent from 10.30 percent with all 35 billion offered bills sold.
The 12-month yield fell to 10.20 percent, from 10.21 percent with all 35 billion offered bills sold.
Sri Lanka's interbank excess liquidity has risen in recent weeks with the central bank buying dollars including money flowing into the bond markets.
When the central bank buys dollars, the balance of payments is monetized and new rupees are created which will be used by the original holders to engage in economic activities and generate imports.
The action results in a temporary fall of interest rates until the new rupees are used through the credit system to generate imports. If the central bank does not return the dollars when the new notes turn into imports, the rupee will depreciate. (Colombo/July16/2026)