Home / Financial Services/ Secondary bond market yield curve remains flat

Secondary bond market yield curve remains flat

Comments / {{hitsCtrl.values.hits}} Views / Monday, 9 September 2019 00:00

By Wealth Trust Securities 

The secondary market bond yield curve from the belly end to the longer end continued to remain flat during the week ending 6 September as a result of continuous selling interest cantering on the 2023 and 2024 maturities. 

Trading activity centred on the liquid maturities of 15.07.23 and two 2024’s (i.e. 15.03.24 and 15.06.24) as its yields were seen increasing during the first four days of the week to weekly highs of 9.95%, 10.07% and 10.17% respectively against its previous weeks closing level of 9.80/85, 9.93/00 and 9.95/99. The upward momentum was further supported by the weekly Treasury bill auction result, where the benchmark 364 day bill weighted average was seen increasing by 11 basis points to 8.33%. 

Nevertheless, renewed buying interest at these levels saw yields decreasing once again on Friday with the said maturities hitting lows of 9.80%, 10.00% and 9.95% respectively. In addition the 2021’s (i.e. 01.05.21, 01.08.21, 15.10.21 and 15.12.21), 01.10.22 and 01.08.26 maturities changed hands from weekly highs of 9.00%, 9.05%, 9.00%, 9.25% each and 10.20% to weekly lows of 8.70% each, 8.80%, 8.75%, 9.22%, 10.11% respectively. 

The outflow of dollars from the Rupee bond market continued for a third consecutive week recording Rs. 500 million for the week ending 4 September.

The daily secondary market Treasury bond/bills transacted volume for the first four days of the week averaged Rs. 7.99 billion. 

In money markets, the total overall liquidity in the system was seen improving to a net deficit of Rs. 22.62 billion against its previous week of Rs. 24.24 billion.

The Open Market Operations (OMO) Department of Central Bank injected liquidity during the week on an overnight basis and term basis (i.e. seven and 14 Days) at weighted average yields ranging from 7.30% to 7.58%. In addition, it injected funds by way of outright purchases of Treasury Bills for dura-tions ranging from 295 to 343 days at weighted averages ranging from 7.83% to 7.97% as well. The overnight call money and repo rates averaged 7.51% and 7.54% respectively for the week.


Rupee loses during the week

In the Forex market, the interbank USD/LKR rate on spot contracts depreciated during the week to close the week at levels of Rs. 180.85/95 against its previous weeks closing level of Rs. 179.00/30 on the back of continued buying interest by banks and portfolio outflows. The daily USD/LKR average traded volume for the first four days of the week stood at $ 64.23 million.

Some of the forward dollar rates that prevailed in the market were 1 month – 181.35/55; 3 months – 182.35/65 and 6 months – 184.00/30.


Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

The Monetary Board should weed out dishonest officers to save its reputation

Monday, 17 February 2020

Asani: Since the loss calculations are defective and auditors have not been fully conversant with the Monetary Board’s role in EPF, shouldn’t we dismiss all the reports, Grandpa? Sarath Mahatthaya: It’s not like that. Though they’ve been weak

COVID-19 – The dark side of global supply chains

Monday, 17 February 2020

The coronavirus, now known as COVID-19, outbreak in China has slowly but steadily rattled the global economy, disrupting virtually every major industry, from food, fashion, pharmaceuticals, entertainment to automobiles and technology. The first casu

Covid-19 and its effect on the airline industry

Monday, 17 February 2020

The effects of the Coronavirus, now named Covid-19 by the World Health Organization (WHO), has already had a numbing effect on the airline industry. Sadly, it appears that the worst is yet to come. SARS in 2002 Readers who remember the Severe Acute

Coronavirus epidemic and China’s slowdown: Economic impact on Sri Lanka

Monday, 17 February 2020

On 28 January 2020, the World Health Organization (WHO) declared the outbreak of the novel coronavirus (2019-nCoV) a global emergency. The new virus emerged in Wuhan, the capital of Hubei Province in China but has now spread to at least 27 other coun

Columnists More