Activity at a standstill ahead of T-Bond auctions

By Wealth Trust Securities

Activity in the secondary bond market came to a standstill yesterday as most market participants opted to stay on the sidelines ahead of today’s Treasury bond auctions. 

Today’s Treasury bond auctions will have in total an amount of Rs. 15 billion on offer, consisting of Rs. 7 billion on a three-year and five months maturity of 15.03.2023 and Rs. 8 billion on a 10-year and 7 months maturity of 15.05.2030. 

The weighted average yields at the auctions conducted on 11 September for the maturities of 15.09.2024 and 15.09.2034 were recorded at 10.27% and 10.59% respectively. 

This was ahead of today’s monetary policy announcement, the sixth for the year 2019, due at 7:30 a.m. The Central Bank of Sri Lanka cut its policy rates by 50 basis points each to 7.00% and 8.00% on its Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) respectively at its last announcement on 23 August. 

The total secondary market Treasury bond/bill transacted volume for 9 October was Rs. 10.62 billion. 

Meanwhile in money markets, the OMO Department of the Central Bank refrained from conducting any auctions for a third consecutive day as the overnight net liquidity surplus in the system stood at Rs. 16.31 billion yesterday. The overnight call money and repo rates averaged 7.47% and 7.52% respectively. 

Rupee loses further

 The USD/LKR rate on spot contracts was seen depreciating further yesterday to close the day at Rs. 180.65/75 against its previous day’s closing levels of Rs.180.50/60 on the back continued buying interest by Banks. The total USD/LKR traded volume for 9 October was $ 58.25 million. Given are some forward USD/LKR rates that prevailed in the market: One month – 181.35/50; three months – 182.50/80; six months – 184.30/70.