Bids accepted at weekly TBill auction surpass offered amount

Thursday, 29 November 2012 00:00 -     - {{hitsCtrl.values.hits}}

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.