Trading continues within a thin range ahead of weekly bill auction

• Money market liquidity crosses Rs. 200 b

By Wealth Trust Securities

Trading in the secondary bond market continued within a thin range yesterday, as the liquid maturities of 15.12.22, 15.09.24, 01.05.25, 2026’s (i.e. 01.02.26 & 01.08.26) and 01.07.28 were seen changing hands at levels of  5.53% to 5.55%, 6.03%, 6.30%, 6.53% to 6.54%, 6.60% to 6.61% and 7.07% to 7.085% respectively.

Furthermore, renewed demand for secondary market bills saw last week’s one year bill changing hands at 4.95% while January, February and October 2021 maturities were exchanged at levels of 4.61% to 4.63%, 4.70% and 4.96% to 4.97% respectively as well.

Today’s auction will see a total amount of Rs. 40 billion on offer, consisting of Rs. four billion on the 91 day bill maturity and Rs. 18 billion each on the 182 day and the 364 day bill maturities. 

At last week’s auction, the weighted average rates on the 91 day and 182 day maturities increased by two and one basis points respectively to 4.59% and 4.71%, while the weighted average rate on the 364 day maturity remained steady at 4.99%. The same weighted average rates were announced as its stipulated cut off rates for today’s auction.

The total secondary market Treasury bond/bill transacted volumes for 19 October was Rs. 5.65 billion.   

In the money market, the overnight surplus liquidity in the system increased to Rs. 207.92 billion yesterday, a level last seen on 26 June. The weighted averages on overnight call money and repos were recorded at 4.53% and 4.57% respectively.

Rupee depreciates further

In the Forex market, USD/LKR rate on spot contracts was seen depreciating further yesterday to close the day at Rs. 184.45/60 against its previous day’s closing level of Rs. 184.30/40 on the back of buying interest by Banks.

The total USD/LKR traded volume for 19 October was $ 66.85 million.   

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)