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Second weekly steep decline on 364-day bill

Comments / {{hitsCtrl.values.hits}} Views / Thursday, 16 May 2019 00:00



  • Bond yields follow suit

By Wealth Trust Securities

The benchmark 364-day bill was seen recording its second consecutive week of steep declines at its auction conducted yesterday. The drop was recorded at 26 basis points to 9.18% following its previous week’s dip of 37 basis points while the 182-day registered a dip of 12 basis points to 8.88%. However, the 91-day bill was seen recording an increase for the first time in 12 weeks by a marginal 1 basis point to 8.52%. The bids to offer ratio was at 3.88:1. 

In the secondary bond market yesterday, yields were seen decreasing leading to the auction and subsequent to its results, mainly on the liquid maturities of two 2021’s (01.03.21 and 01.08.21), 15.03.23 and 15.03.24 to intraday lows of 9.65%, 9.75%, 10.35% and 10.41% against its opening highs of 9.70%, 9.90%, 10.45% and 10.52%. In addition, the 15.10.21, 15.05.23, two 2026’s (i.e. 01.06.26 and 01.08.26), 15.01.27 and 01.05.29 maturities were seen changing hands at levels of 9.85% to 10%, 10.46%, 10.72% to 10.73%, 10.73% to 10.78% and 10.86% to 10.90%, respectively, as well.

The total secondary market Treasury bond/bill transacted volumes for 14 May was Rs. 13.40 billion. 

In money markets, the overnight net surplus liquidity in the system remained Rs. 25.05 billion yesterday as the Open Market Operations (OMO) Department of the Central Bank continued to drain out liquidity by way of two days, six days and eight days repo auctions at weighted averages ranging from 8.55% to 8.59%. The overnight call money and repo rates averaged 8.41% and 8.49%, respectively.

Rupee appreciates 

The USD/LKR rate on spot contracts appreciated yesterday to close the day at levels of Rs.176.20/30 against its previous day’s closing levels of Rs.176.80/90 on the back of selling interest by banks.

The total USD/LKR traded volume for 15 May was $ 48.36 million Some of the forward USD/LKR rates that prevailed in the market were 1 month – 177.00/30; 3 months – 178.90/20 and 6 months – 181.50/90.


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