Sri Lanka rolls over US$36.24mn out of US$180mn in maturing dollar bonds

Sri Lanka has rolled over 36.24 million US dollars out of 180 million dollar denominated debt securities maturing on June 30, data from the state debt office showed.

The debt office sold 29.57 million US dollars of 10 month Sri Lanka Development Bond styled securities at a yield of 7.40 percent.

Sri Lanka’s 12-month rupee Treasury bills have been yield controlled at 5.21 percent, though a de facto policy rate and any remaining tranche is bought with printed money, triggering forex shortages and driving dollar yields higher.

1.8 million US dollars of 1 year 10 month bonds were sold at 7.65 percent.

4.72 million dollars of 2 year 10 month bonds were sold at 7.99 percent.

0.15 million dollars of 3 year 7 month bonds were sold at 7.68 percent.

On June 30, 180 million US dollars of Sri Lanka Development Bonds are due to mature.

Sri Lanka has been printing money after cutting taxes in December 2019 and earning a downgrade. Sri Lanka also expanded the state worker cadre and had given them new allowances, pushing up the salary bill.

The rupee’s non-credible peg was so far fallen to 200 to the US dollars from 182 before the tax cuts.

The central bank under the last administration printed money in 2018 despite taxes being hiked and brought the rupee down to 182 to the US dollar from 153.