Bond markets inactive ahead of weekly T-bill auction
Tuesday, 6 August 2013 00:00
By Wealth Trust Securities
Activity in secondary bond markets were sluggish yesterday ahead of today’s weekly Treasury bill auction where only the 364-day bill will be on offer for a second consecutive week for an amount of Rs. 12 billion.
At last week’s auction, the weighted average on the 364-day bill dipped by four basis points to 10.52% as the amount accepted doubled the offered amount of Rs. 12 billion. The 364-day bills in secondary markets were seen quoted at levels of 10.50/54 prior to the auction. A very limited amount on the liquid two five year maturities (i.e. 1.7.2018 and 15.8.2018) were seen changing hands yesterday within the range of 11.25% to 11.27% and 11.34% to 11.36% respectively while the three-year, four-year and eight-year maturities were seen quoted at levels of 10.87/92, 10.95/05 and 11.52/60 respectively.
Liquidity in money markets remained high at Rs. 32.36 billion yesterday but reduced from its Thursday’s amount of Rs. 38 billion as overnight call money and repo rates remained steady to average 8.71% and 8.12% respectively.
The Open markets Operations (OMO) department of the Central Bank was seen mopping up an amount of Rs. 10 billion on an overnight basis at a weighted average of 7.70% while an additional amount of Rs. 22.36 billion was seen been deposited at its repo window rate of 7.00%. However, attempts to drain out liquidity on a more permanent basis failed as all bids were rejected on a planned Rs. 20 billion repo auction for a period of seven days.
Rupee spot contracts remain steady
The USD/LKR spot rate remained broadly steady yesterday to close the day at Rs. 131.60/65. However spot next contracts were seen closing the day marginally lower at Rs. 131.64/68 on the back of importer demand against its Friday’s closing of Rs. 131.61/63. The total USD/LKR traded volume for the previous day (2 August 2013) stood at $ 68.97 million. Some of the forward dollar rates that prevailed in the market were one month – Rs. 132.54; three months – Rs. 134.15 and six months – Rs. 136.45.