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Central Bank rejects 3-year bond auction again

May 23 2006 (LBO) - Sri Lanka’s Central Bank, Tuesday rejected all bids sent in for the three-year bond auction for the second successive week, but did not give any reason.
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A fortnight ago, the bank sold three-year yields 10.
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87 percent, higher than 10.85 percent sold at the previous auction.
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Market players said that the bank was expecting bids lower than 11.00 percent, which may have been the reason to call the auction off.

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The bank, which conducts auctions on behalf of the treasury, offered a billion rupees worth of paper but said it received offers worth 1,215 million rupees for the issue, which carried a coupon rate of 7.5 percent.

Three-year paper currently trades at around 11.

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28 percent in the secondary market.

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