Yesterday it sold Rs 30,582 million worth of T-Bonds to the market. Those comprised Rs 10,294 million worth of 2023 maturities at a weighted average yield (WAY) of 9.76% and Rs 20,288 million worth of 2025 maturities at a WAY of 9.97% respectively.
Market sources told Ceylon FT, that these rates were in tandem with yesterday's secondary market trading of similar maturities. Nevertheless, at the previous auction, i.e. the 2025 maturity, at the 11 August, 2025 primary auction, fetched a lower WAY of 9.67%.
Meanwhile, the 2023 maturity, prior to yesterday, was sold to the market on 7 July, 2015 at a WAY of 9.58%, 18 bps less than yesterday's WAY, at a primary auction.
Meanwhile, during the same period last year, the last regime borrowed a mere Rs 536,920 million from the market by selling T Bills and T Bonds to the market on a gross basis. Therefore, an envisaged borrowing of similar borrowing totallingRs 1,217,221 million by today
(ie. In the calendar year to date), is a Rs 680,301 million or a 126.70% increase over similar such borrowings made in the previous year.
Such increased borrowings are due to a combination of lagging revenue and higher government recurrent expenditure to honour promises of handouts made in respect of the 8 January, 2015 Presidential Poll and last Monday's concluded General Election, both negativisms as far as the economy is concerned.
Courtesy: Ceylon Financial Today 26 August 2015