Money market liquidity back to equilibrium

Liquidity in money markets was back to a balance after a lapse of three days as the market reflected a marginal surplus of Rs. 1.2 b yesterday. A dollar inflow into the system which possibly may have been purchased by Central bank and non-sterilised was seen as the reason for the improved liquidity position according to market sources.

The Central Bank did not conduct any auctions yesterday in order to infuse or drain liquidity from the system. Call money and repo rates remained steady to average 10.58% and 9.61% respectively.

In secondary bond markets, activity remained rather dull yesterday as market participants adopted a wait and see approach.

Despite dollar inflows into the system considerable demand for cash and tom dollar contracts saw the USD/LKR rate hold steady at Rs. 132.37 yesterday. The dollar/rupee volume for the previous day stood at US$ 49.4 million. Given below are some forward dollar rates that prevailed in the market: one month – 133.69; three months- 136.24; and six months – 140.17.

(Source: Wealth Trust Securities Ltd.)

Treasury Bills

91 Day Bills        -    11.45 / 11.55

182 Day Bills        -    13.12 / 13.18

364 Day Bills        -    13.32 / 13.38



Treasury Bonds

01/04/14        -    13.77 / 13.80

15/07/15        -    13.93 / 13.97

01/04/16        -    14.22 / 14.28

15/07/17        -    14.31 / 14.36

01/11/19        -    14.55 / 14.70