Interest rates in Govt Securities Market drop

The yield rates on Treasury bills declined further at the primary auction held on November 4, 2009. The yield rate on Treasury bills with a maturity of 91 days declined by 36 basis points to 8.14 percent, the lowest since May 2005.

This trend was reflected in the yield rates of Treasury bills with the maturities of 182 days and 364 days as well. With this reduction, primary market yield rates of the Treasury bills have declined by 906 - 938 basis points during the past 12-month period.

The secondary market Treasury bill yield rates also continued on its decelerating path during this period. The primary and secondary market yield rates of Treasury bonds also followed the same trend and declined by 843 - 1088 basis points during the past 12 months. The extension of the yield curve up to the six year horizon was also witnessed during this period with the prudent public debt management strategies.

The reduction in yield rates observed during the recent past is in line with the gradual easing of the monetary policy stance by the Central Bank of Sri Lanka.