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Bond market activity dries up ahead of weekly bill auction


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  • Overnight liquidity turns negative

By Wealth Trust Securities

The shortened trading week commenced on a lacklustre note as activity in the secondary bond market dried up yesterday, ahead of today’s weekly bill auction. Limited trades took place on the maturities of the two 2023s (i.e. 15.03.23 and 15.07.23) and two 2024s (i.e. 15.03.24 & 15.06.24) within the range of 9.70% to 9.77% and 10.03% to 10.07% respectively.

Today’s auction will have on offer a total amount of Rs. 22 billion, consisting of Rs. 1 billion of the 91-day, Rs. 2 billion of the 182-day and Rs. 19 billion of the 364-day maturities. At last week’s auction, 364 day bill weighted average increased by 11 basis points to 8.33% while all bids received on the 91-day and 182-day maturities were rejected. 

The total secondary market Treasury bond/bill transacted volumes for 6 September was Rs. 13.11 billion. 

In money markets, the overnight call money and repo rates increased marginally to average 7.41% and 7.48% respectively as overnight liquidity turned negative to record a net deficit of Rs. 9.58 billion yesterday. 

The Open Market Operations (OMO) Department of the Central Bank of Sri Lanka injected an amount of Rs. 15 billion on an overnight basis by way of a Reverse Repo auction at a weighted average of 7.38%. 

It further injected an amount of Rs. 4 billion by way of a seven-day term reverse repo auction at a weighted average rate of 7.39% while an amount of Rs.3.5 billion was injected by way of a 14 day term reverse repo auction at a weighted average rate of 7.46, valued today. 

Rupee appreciates marginally

 In Forex markets, the Interbank USD/LKR rate on spot contracts were seen closing the day marginally higher at Rs. 180.50/60 against its previous day’s closing levels of Rs. 180.85/95 on the back of selling interest by banks.

The total USD/LKR traded volume for 6 September was $ 61.25 million.

Given are some forward USD/LKR rates that prevailed in the market: one month – 180.90/10; three months – 181.90/20; six months – 183.60/90.


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