Weekly weighted averages decrease

• Secondary market bond yields continue to decline

By Wealth Trust Securities

The weighted average yields at yesterday’s weekly Treasury bill auction were seen decreasing once again in comparison to its previous weeks weighted averages. The 182-day and 364-day maturities recorded a drop of 04 basis points each to 9.99% and 11.20% respectively. 

The auction had on offer a total amount of Rs. 18 billion which was successfully subscribed as the bid to offer ratio increased to eight week high of 3.49:1.

The secondary bond market remained active yesterday as yields continued to decline, mainly on the short end of the yield curve. The yield on the three-year maturity of 15.12.21 was seen dipping to an intraday low of 11.70% against its days opening high of 11.80% while two-way quotes on the rest of the curve dipped as well. Furthermore, buying interest in the secondary bill market saw the 364-day bill change hands at 11.05% post auction.

The total secondary market Treasury bond Transacted volume for 18 December was Rs. 13.31 billion.

In the money market, the overnight call money and repo rates averaged at 9% and 8.96% respectively as the net liquidity shortfall stood at Rs. 91.30 billion yesterday.

The OMO Department of the Central Bank, conducted two reverse repo auctions of Rs. 17.5 billion and Rs. 20 billion for durations of overnight and seven days, which were successfully subscribed at weighted average yields of 8.86% and 8.93%. In addition, a further amount of Rs. 57.78 billion was injected at the Standing Lending Facility Rate (SLFR) of 9.00%.

Rupee dips further

Continued buying interest by banks in the Forex market saw the USD/LKR rate on spot contacts losing further to close the day at Rs. 180.50/65 against its previous day’s closing of Rs. 180.10/30.

The total USD/LKR traded volume for 18 December was $ 40.19 million.

Some of the forward USD/LKR rates that prevailed in the market were: One month – 181.50/00; three months – 183.50/00; six months – 186.50/00.