Upward momentum continues ahead of weekly bill auction

Wednesday, 28 August 2019 00:00 -     - {{hitsCtrl.values.hits}}



  • 43-week low offered amount at auction
  • Overnight liquidity decreases

By Wealth Trust Securities

The secondary market bond yields were seen increasing further yesterday for a second consecutive day on the back of continued selling interest ahead of today’s weekly Treasury bills auction. 

The 2024 maturities (i.e.15.03.24 and 15.06.24) were the more activity traded duration as its yields were seen hitting intraday highs of 9.92% and 9.90% respectively against its previous day’s closing levels of 9.80/85 and 9.85/90. 

In addition, limited amount of activity was witnessed of the 2021s (i.e. 01.05.21 & 01.08.21), 01.10.22 and 15.07.23 at levels of 8.65% to 8.70%, 8.75% to 8.80%, 9.25% and 9.70% respectively as well.

Today’s bill auction, the first subsequent to the 50 basis points policy easing, will have a 43-week low total amount of 12.5 billion on offer, consisting of Rs. 1 billion each on the 91-day and 182-day bill maturities and a further Rs. 10.5 billion of the 364-day maturity. 

At last week’s auction, the weighted averages increased across the board to 7.84%, 7.89% and 8.31% on the 91-day, 182-day and 364-day maturities respectively.

The total secondary market Treasury bond/bill transacted volumes for 26 August was Rs. 5.62 billion. 

In money markets, the overnight call money and repo rates averaged 7.30% and 7.36% respectively as the overnight net liquidity surplus in the system reduced to Rs. 9.06 billion yesterday. 

The OMO (Open Market Operations) Department of the Central Bank of Sri Lanka refrained from conducting any auctions yesterday for a second consecutive day.

Rupee loses marginally

 In the Forex market, the USD/LKR rate on spot contracts were seen closing the day marginally lower at levels of Rs. 179.75/85 against its previous day’s closing levels of Rs. 179.60/75, subsequent to trading within the range of Rs. 179.59 to Rs. 179.80.

The total USD/LKR traded volume for 26 August was $ 67.05 million

Given are some forward USD/LKR rates that prevailed in the market: one month – 180.25/45; three months – 181.20/50; six months – 182.60/90.