ECONOMYNEXT – Sri Lanka’s Treasury bills yields rocketed up, with the 3-month bill yield rising 341 basis points to 15.69 percent, data from the state debt office showed, with the short term yield curve starting to slope upwards in a partial correction.

The 3-month yield went up 120 basis points to 14.12 percent.

The 6-month yield went up 311 basis points to 12.25 percent.

The increase of the highest one day gains in gilt yields seen.

The debt office offered 40 billion rupees of 3-month bills and sold 64 billion.

20 billion rupees of 6-month bills were offered and 4.2 billion was sold.

20 billion rupees of 12-month bills were offered at 4.3 billion was sold.

The central bank printed money for two years under Modern Monetary Theory, for stimulus and has triggered the biggest economic crisis in its history.

Sri Lanka’s rupee fell 200 to 300 to the US dollar after a float failed due to a surrender requirement and low policy rates.

The central banks long term policy of printing money to keep rates down, triggering currency crisis and raising rates to very high levels to stabilize the economy has been labelled ‘rawulath ne kendath ne’ by analysts.

There have been calls to tightly control the agency’s, ability to conduct open market operations, manipulate interest rates artificially down and create economic instability.

For 72 years Mercantilists have printed money created forex shortages and blamed it on imports and imposed trade controls on the people, without reforming or closing the central bank. (Colombo/Apr06/2022)