The central bank has been frantically trying to mop up liquidity generated from deficit financing.
The central bank's Treasury bill stock shot up to 58 billion rupees after last weeks bill auction rejection. Three month yields move up 02 basis points to 8.
40 percent, 6-month moved up 02 basis points to 9.14 percent and the 12-month yield was flat at 12.
0 percent.
The debt office, which is a unit of the Central Bank said it accepted 9.
08 billion rupees in bids from real buyers for the auction in which 10.
5 billion rupees of bills matured.
At the last auction all the bids were rejected.
Due to a flaw in Sri Lanka's monetary law which has kept inflation high and the rupee in chronic depreciation since the creation of the central bank, the monetary authority is forced to intervene in Treasuries auction in quantity easing exercises.