364 day bill weighted average increases for first time in eight weeks

• Secondary bond market yields continue to increase
  
   

By Wealth Trust Securities

The 364 day bill weighted average at yesterday’s Treasury bill auction increased for the first time in eight weeks by 03 basis points to 10.72%. Interestingly the total offered amount of Rs. 21 billion was accepted only on the 364 day maturity once again, rejecting all bids for the 91 day and 182 day maturities. The bids to offer ratio stood at 2.54:1.   

In the secondary bond market, yields were seen increasing further on the back of moderate volumes changing hands. Selling interest saw yields increase on the 01.08.21, 01.08.26, 15.01.27 and 15.06.27 maturities to intraday highs of 11.05%, 11.40%, 11.41% and 11.43% respectively, against its previous day’s closing levels of 10.95/05, 11.32/37, 11.32/35 and 11.36/40 while two way quotes on the rest of the yield curve increased as well.

The total secondary market Treasury bond/bill transacted volumes for 12 February was Rs. 6.02 billion. In the money market, the overnight net liquidity shortfall reduced further to Rs. 62.88 billion yesterday as the OMO Department of Central Bank continued to infuse liquidity by way of a seven day term reverse repo auction for a successful amount of Rs. 5.00 billion at weighted average yield 8.92%. It further injected an amount of Rs. 10 billion by way of an overnight basis at a weighted average rate of 8.96%. The overnight call money and repo rates averaged 8.98% and 9.00% respectively.

 

Rupee losses further 

The USD/LKR rate on spot contracts depreciated further yesterday to close the day at levels of Rs. 178.40/55 against its previous day’s closing levels of Rs.178.30/40 on the back of continued buying interest by Banks.

The total USD/LKR traded volume for 12 February was $ 104.50 million.

Some forward USD/LKR rates that prevailed in the market are: 1 month - 179.25/50; 3 months - 181.15/45; 6 months - 184.10/40.