Market liquidity remains at net deficit

Tuesday, 18 December 2012 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The liquidity shortfall that prevailed during the most part of last week continued, with the Central Bank injecting an amount of Rs. 13.70 billion into the system at the window rate of 9.50%. This intern helped keep overnight call money and repo rates steady to average 10.30% and 9.40% respectively. This was subsequent to the OMO auction being rejected due to high bid rates.

Meanwhile, there was hardly any trading in the secondary bond market as yields remained steady during the day with active two way quotes being seen only on the five and six year maturities at levels of 12.45%-12.55% and 12.75%-12.90% respectively. Buying pressure which prevailed in the secondary treasury bill market late last week, reduced as the Public Debt Department (PDD) of Central Bank announced a total auction amount of Rs. 15 billion, an increase from previous week’s offered amount of Rs. 12 billion.

Given below are the closing, secondary market yields for the most frequently traded maturities:

In Forex markets, the rupee depreciated marginally by around 30 cents to a low of Rs. 128.80 on the back of demand for contracts value today (18). However, selling at these levels saw the rupee rebound marginally towards the latter part of the day to close at Rs. 128.65. The total dollar/rupee volume for the previous day (14) was US$ 56.10 million. Given are some forward dollar rates that prevailed in the market: one month – 129.80; three months – 131.75 and six months – 134.35.