Upward momentum persists ahead of weekly T-bill auctions

Wednesday, 22 September 2021 00:05 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The start of a new trading week saw the upward momentum in secondary market bond yields continuing as the maturities of 01.12.24 and 15.05.30 changed hands at highs of 8.40% and 10.21% respectively against its previous day’s closing levels of 8.25/40 and 9.90/20.

The weekly bill auction due today will see a total amount of Rs. 39 billion on offer, consisting of Rs. 10 billion of the 91-day maturity, Rs. 13 billion of the 182-day maturity and Rs. 16.5 billion of the 364-day maturity.

At last week’s auction, the weighted average yields of the 91-day and 364-day maturities increased by seven basis points each to 6.08% and 6.12% respectively while all bids received on the 182-day maturity were rejected.

The maximum yield guidance or stipulated cut-off rate given for the weekly Treasury bill auctions was removed for this week’s auction. The cut-off rate at last week’s auction was set at 6.12% on the 364-day bill while the 91-day and 182-day bills’ weighted averages were decided below it.

Meanwhile, the National Consumer Price Index (NCPI) for the month of August decreased for the first time in seven months to register 6.7% on the basis of its point-to-point against its previous month’s 6.8%, while its annual average increased to 5.5%.

The total secondary market Treasury bond/bill transacted volume for 17 September was Rs. 3.56 billion.

In money markets, the weighted average rates on call money and repo remained steady at 5.96% and 5.93% respectively, as an amount of Rs. 272.51 billion was withdrawn from the Central Bank’s SLFR of 6%. The net liquidity deficit decreased marginally to Rs. 200.85 billion yesterday with an amount of Rs. 71.66 billion being deposited at the Central Bank’s SDFR of 5%.

USD/LKR

The Forex market continued to remain inactive yesterday.

The total USD/LKR traded volume for 17 September was $ 60.26 million.

(References: Central Bank of Sri Lanka, Bloomberg e-bond trading platform, money broking companies)