364 day bill average leapfrogs to a ten week high

By Wealth Trust Securities 

The increasing trend in the weighted averages intensified at yesterday’s weekly Treasury bill auction with the weighted average on the 364 day bill increasing by 34 basis points to a 10-week high of 9.28%. This was closely followed by the 91 day bill and 182 day bill as it was seen increasing by 27 and 30 basis points respectively to 8.02% and 8.29%. The exact offered amount of Rs. 28.50 billion was met at the auction as the bid to offer ratio decreased to a 19-week low of 1.81:1.

The secondary bond market yields continued to increase yesterday, recording its second consecutive day of increases on the back of continued selling interest. Yields on the liquid maturities of 15.12.21 and the two 2026’s (i.e. 01.06.26 and 01.08.26) were seen increasing to intraday highs of 10.00%, 10.15% and 10.20% respectively against its days opening lows of 9.80%, 10.06% and 10.10%. Furthermore, the two 2021 maturities (i.e.01.03.21 and 01.08.21) were also traded within the range of 9.65% to 9.90% while on the short end of the curve, the 01.04.18 maturity was seen changing hands within the range of 7.90% to 7.95% as well.

The total secondary market Treasury bond/bill transacted volumes for 12 February was Rs. 6.45 billion.

In money markets, the overnight call money and repo rates averaged at 8.13% and 7.62% respectively as the net liquidity surplus stood at Rs. 20.31 billion yesterday. The OMO department of Central Bank drained out an amount of Rs. 11.5 billion on an overnight basis by way of a repo auction at a weighted average of 7.25%. 

Rupee depreciates further  

The USD/LKR rate on spot contracts continued its depreciating trend yesterday to close the day at Rs. 155.35/45 against its previous day’s closing levels of Rs. 154.90/00, on the back of heavy importer demand and reluctant exporter selling.

The total USD/LKR traded volume for 12 February was $ 74.00 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 156.15/40; 3 Months - 157.80/00 and 6 Months - 160.45/65.