364 day bill increases to 18-week high

• Accepted volume below offered volume for the first time in 13 weeks

By Wealth Trust Securities

The start of the shortened trading week saw the 364 day bill weighted average increasing for a third consecutive week by 10 basis points to an eighteen week high of 8.51% closely followed by the 91 day bill by 07 basis points to 7.56% at its weekly auctions held yesterday. All bids received for the 182 day bill was rejected as the total accepted volume was seen falling short of the total offered volume for the first time in 13 weeks while the ratio of total bids received to total offered volume was seen dipping to a 13 week low of 1.60:1 as well. 

In the secondary bond market, the maturities of 2022’s (i.e. 15.03.22 & 01.10.22), 15.10.27 and 15.09.34 were traded at levels of 9.05%, 9.12%, 10.28% and 10.68% to 10.70% respectively on the back of moderate activity.  In the secondary bill market, the latest 364 day maturity was traded at a high of 8.60%.

The total secondary market Treasury bond/bill transacted volume for 8 November was Rs. 1.1 billion. 

In money markets, the overnight call money and repo rates averaged 7.52% and 7.57% respectively as the Open Market Operations (OMO) Department of Central Bank injected an amount of Rs. 13.5 billion by way of an overnight Reverse repo auction at a weighted average rate of 7.54%. Furthermore it injected an amount of Rs. 4.5 billion for 7 days at a weighted average rate of 7.60% as the overnight net liquidity surplus in the system decreased to Rs. 7.40 billion yesterday.

Rupee appreciates   

In the Forex market, the rupee on spot contracts were seen appreciating yesterday to close the day at Rs. 180.25/35 against its previous day’s closing level of Rs.180.45/65 on the back of selling interest by banks.

The total USD/LKR traded volume for 8 November was $ 73.75 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 180.75/00; 3 months - 181.85/15 and 6 months - 183.60/00.