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Central Bank introduces a new Primary Issuance System for Treasury Bonds

The Central Bank of Sri Lanka will introduce a new primary issuance system for Treasury bonds (T-bonds).

Effective from July 27, 2017, the new system replaces the existing fully auction based issuance system for T-bonds, that has been in practice since February 2015.

The main purpose of introducing the new system is to further enhance the efficiency and transparency of the domestic borrowings of the Government.

The new system is more structured and includes regular monthly T-bond auctions. Each monthly auction offers two T-bond series of different maturities and tenures of the series are expected to match the resource availability in the market.

Issuance under each series takes effect in three or less sequential phases depending on the outcome of each preceding phase. Phase I explores issuance of the entire announced volume in a competitive multiple price auction system through reasonable market bids.

However, in the event of any under allocation at Phase I, the Phase II opens for voluntary, volume based bidding.

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