Yields edge up further ahead of monetary policy announcement

Thursday, 8 April 2021 01:46 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The weekly Treasury bill auction held yesterday saw a three-week high volume of Rs. 18.90 billion being accepted, dominated by the 91-day bill as it represented 92% of the total accepted volume or Rs. 17.43 billion. The weighted average rate on the 91-day maturity increased by three basis points to 5.08%, while the weighted average rates on the 182-day and 364-day maturities increased by two and four basis points respectively to 5.12% and 5.15%. The bids-to-offer ratio too increased to a three-week high of 1.35:1 as well.

In secondary bond markets, yields increased further yesterday as the maturities of 15.12.22, 01.09.23 and 15.01.26 hit highs of 5.95%, 6.35% and 7.15% respectively, against its previous day’s closing level of 5.90/95, 6.25/35 and 7.05/20, admit moderate volumes.

This was ahead of today’s monetary policy announcement due at 7:30 a.m., the third for the year. The Central Bank of Sri Lanka kept policy rates unchanged for the fifth consecutive occasion at its last announcement on 4 March.

The total secondary market Treasury bond/bill transacted volume for 6 April was Rs. 3.4 billion.

In money markets, the weighted average rates on call money and repo remained steady at 4.64% and 4.66% respectively, as an amount of Rs. 140.88 billion was deposited at Central Banks SDFR of 4.50%. The net liquidity surplus stood at Rs. 115.01 billion yesterday as an amount of Rs. 25.87 billion was withdrawn from Central Banks SLFR of 5.50%.

USD/LKR

In the Forex market, the USD/LKR rate on the more active one-week forward contracts were seen closing the day at levels of Rs. 201.50/202.50 yesterday against its previous day’s closing level of Rs. 201/201.50.

The total USD/LKR traded volume for 6 April was $ 61.70 million.

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