Upward momentum in weekly T-Bill weighted averages continues

• Secondary market bond yields steady

By Wealth Trust Securities

The weekly Treasury bill weighted average yields were seen continuing their upward momentum at the auction conducted yesterday as its total bids accepted to total bids received ratio decreased further to 0.41:1.  

The weighted average yield on the market favourite 364-day bill increased for a third consecutive week, this time by around three basis points to 8.61%. The 182 day bill weighted average, which remained steady last week, increased by two basis points to 8.15%. The 91 day bill, which was accepted after a lapse of one week, recorded a weighted average yield of 7.55% against its previous yield of 7.50%. The exact total offered amount of Rs. 25.5 billion was successfully accepted at the auction. 

Activity in secondary bond markets continued within a tight range as the liquid maturities of 01.09.23 and two 2024s (i.e. 15.06.24 and 15.09.24) were seen changing hands at levels of 9.30% to 9.32% and 9.50% to 9.52% respectively. In addition, the maturities of 15.07.23, 01.01.24, 15.03.25, and two 2027s (i.e. 15.06.27 and 15.10.27) were traded at levels of 9.21%, 9.45%, 9.55% to 9.57% and 9.74% to 9.77% respectively as well. 

The total secondary market Treasury bond/bill transacted volume for 21 January 2020 was Rs. 6.91 billion.

In money markets, overnight call money and repo rates averaged 7.49% and 7.50% respectively as the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen injecting an amount of Rs. 5 billion at a weighted average of 7.54% by way of an overnight reverse repo auction. However, overnight net liquidity surplus in the system increased further to Rs. 31.02 billion. 

Furthermore, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka conducted a term Reverse Repo auction, in lieu of a term reverse repo maturity of Rs. 25 billion and injected an amount Rs. 20 billion for 14 days at a weighted average rate of 7.53% value today.

Rupee loses marginally 

The USD/LKR rate on spot contracts was seen closing yesterday marginally lower at Rs. 181.45/50 in comparison to its previous day’s closing of Rs. 181.35/45, on the back of buying interest by banks.

The total USD/LKR traded volume for 21 January 2020 was $ 163.60 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 181.90/05; three months - 182.90/10 and six months - 184.45/75.