Steady outcome at bond auctions 

• Secondary market yields decline ahead of weekly bill auction

By Wealth Trust Securities

The Central Bank of Sri Lanka was seen successfully raising a total amount of Rs. 30 billion through two Treasury bond auctions yesterday. The three-year and eight month maturity of 01.09.23 and the 10 year and four month maturity of 15.05.30 recorded weighted averages of 9.39% and 9.99% respectively. 

In the secondary bond market, yields were seen declining yesterday in the morning hours of trading leading to the auction, mainly on the liquid maturities of 01.09.23 and two 2024s (i.e. 15.06.24 and 15.09.24) to intraday lows of 9.32%, 9.55% and 9.54% respectively against its opening highs of 9.35% and 9.60% each. In addition, maturities of 01.05.20, 15.12.21, two 2023s (i.e. 15.03.23 and 15.07.23) and 15.09.34 were traded at levels of 7.70%, 8.62% to 8.70%, 9.20%, 9.24% to 9.25% and 10.11% to 10.12% respectively as well. However, selling interest subsequent to auction results saw yields close the day marginally higher once again.    

In secondary bills, 8 January 2021 maturity changed hands at levels of 8.45%.

This was ahead of today’s weekly Treasury bill auction, where a total amount of Rs. 25 billion will be on offer consisting of Rs. 4 billion of the 91 day maturity, Rs. 5 billion of the 182 day maturity and further Rs. 16 billion of the 364 day maturity. At last week’s auction, the weighted averages of the 182 day and 364 day maturities increased by nine and seven basis points respectively to 8.13% and 8.52% while the weighted average of the 91 day decreased by one basis point to 7.50%.

The total secondary market Treasury bond/bill transacted volume for 9 January was Rs.11.05 billion.

In money markets, overnight call money and repo rates decreased marginally to average at 7.41% and 7.48% respectively, as the overnight net liquidity surplus in the system stood at Rs. 33.88 billion yesterday.

The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka drained out an amount Rs. 12.88 billion on an overnight basis at a weighted average rate of 7.46% by way of a Repo auction.  

Rupee loses 

 In the Forex market, the USD/LKR rate on spot contracts was seen depreciating yesterday to close the day at Rs. 181.50/60 against its previous day’s closing levels of Rs. 181.30/35 on the back of buying interest by banks.

The total USD/LKR traded volume for 9 January was $96.95 million.

Some of the forward USD/LKR rates that prevailed in the market were: one month – 182.00/20; three months – 183.00/20 and six months – 184.50/80.