Treasury Bill rates adjusted beyond the CBSL policy rate adjustment

The 364 days maturing T-Bill rates fell 381 basis points and 182 days fell by 339 basis points at the first primary auction after the CBSL rate cut on 1 June 2023 according to charts.lk

It said investors had sent out over Rs. 300 billion worth bids into the auction, mostly for 364 days.

Charts.lk said the sharp decline in the primary market rate and the bidding pattern indicates that the market expects further reductions in the interest rate in the near future. 

The absence of the T-Bond auctions would also have tempted the long-term investors cum traders to buy more 364Day T-bills with excess liquidity.