Primary market rates continue to decrease ahead of budget reading

By Wealth Trust Securities

The weighted averages at yesterday’s weekly Treasury bill auction were seen continuing its decreasing trend for a second consecutive week with the bids to offer ratio increasing to an eight weeks high of 3.68:1 as well. 

The 91 day and 182 day bills reflected a decline of eight basis points each to 8.67% and 9.02% respectively followed by the 364 day bill by four basis points to 9.44%. An amount of Rs. 20.61 billion was accepted in total against its total offered amount of Rs. 21 billion. 

The secondary bond market remained active yesterday as yields on the 01.08.24 maturity was seen dipping to an intraday low of 10.00%. In addition, activity was witnessed on the maturities of 15.06.18, 01.07.19 and 01.08.26 at levels of 9.00%, 9.60% and 10.10% respectively.

The total secondary market Treasury bond/bill transacted volumes for 7 November 2017 was Rs. 4.04 billion.

In money markets, the overnight call money and repo rates averaged 8.15% and 7.66% respectively as the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka drained out an amount of Rs. 10 billion on an overnight basis by way of a Repo auction at a weighted average of 7.25%. The net liquidity surplus in the system stood at Rs. 17.01 billion yesterday. 

Rupee remains mostly unchanged 

The dollar/rupee rate remained mostly unchanged to close the day at Rs. 153.35/42 yesterday on its spot contracts with the market in equilibrium. 

The total USD/LKR traded volume for 7 November was $ 35.25 million. Some  of the forward USD/LKR rates that prevailed in the market were one month - 154.15/25; three months - 156.00/10 and six months - 158.60/80.