Bids accepted at weekly TBill auction surpass offered amount

By Wealth Trust Securities

The Central Bank’s borrowing costs increased at yesterday’s Treasury bill auction with approximately Rs. 23 billion being accepted.

The weighted averages (WAY) of the 364-day and 182-day bills continued its upward trend increasing by four basis points (bp) and two bp respectively to 12.85% and 12.09%.  The benchmark 91-day bill in the meantime increased by five bp to 12.79%.

The total amount accepted was Rs. 5 billion more than amount offered, reflecting the highest gap in last five weeks.  The 182-day bill continued to dominate the auction as it represents 48% of the total accepted amount, which in absolute terms, is more Rs. 10 billion.

In the secondary bond market, a limited amount of activity was witnessed prior to the announcement of the auction results, mainly on the three-year maturity where the yields dipped to an intraday low of 12.40% and on the five-year and six-year maturities, the yields quoted were 12.43% and 12.90% respectively, there again reflecting an marginal decrease.

In the overnight money market, the Central Bank refrained from conducting any auctions under its Open Market Operation (OMO), as liquidity stood at a surplus of Rs. 0.65 b in comparison with Monday’s net short of Rs. 2.02 b. This in turn resulted in call money and repo rates remaining steady to average 10.59% and 9.65% respectively.

Rupee remains steady

The USD/LKR rate remained steady for a fourth consecutive day, to close the day at Rs. 130.15/20. The total USD/LKR volume for the previous day stood at US$ 44.00 million. Given below are some forward dollar rates that prevailed in the market, one-month – 131.30; three months – 133.88; and six months – 137.03.