Monday, 5 August 2013 00:00
By Wealth Trust Securities
The week ending 2 August witnessed a considerable fluctuation in surplus liquidity in money markets from a low of Rs 1.86 b during the beginning of the week to a high of Rs. 38 b towards the latter part of the week and closed the week at Rs. 31 b.
The surge in liquidity was mainly attributed to a bond maturity to the tune of Rs. 79 b which fell due on 1 of August 2013, due to repayment to investors which in turn prompted authorities to mop up this excess by way of overnight repo auctions, term repo auctions and outright sales of Treasury bills. Overnight call money and Repo rates dipped towards the latter part of the week to average 8.78% and 8.26% respectively for the week.
In secondary bond markets, yields increased during the week mainly on the liquid two five-year maturities (i.e. 1 April 2018 and 15 August 2018) to weekly highs of 11.28% and 11.35% respectively from its lows of 11.23% and 11.28%. In addition, the three year maturity was seen closing the week at levels of 10.88/95 while the eight year was at levels of 11.52/60.
Activity in secondary bill markets remained high during the week, leading to the weekly auction and subsequent to the auction as well. The 364 day bill was seen changing hands within the range 10.45% to 10.52% while duration centering the 182 day bill was seen changing hands within the range of 9.75% to 9.95% as well. This week’s Treasury bill auction, witnessed the rare phenomenon of only the 364 day bill been offered which saw its weighted average dip by four basis points to 10.52% while the amount accepted was twice the offered amount of Rs. 12 b.
Rupee steady during the week
The rupee remained steady on spot contracts during the week at Rs. 131.60/70 while spot next contracts were seen changing hands within a weekly low of Rs. 131.76 and high of Rs. 131.61 to close the week at Rs. 131.61/63.
The daily average USD/LKR traded volume for the first four days of the week was at US$ 53.18 million. Some of forward dollar rates that prevailed in the market were one month – 132.45; three months – 134.15 and six months – d136.25.