Money market liquidity ends 2012 in the red

By Wealth Trust Securities

Central Bank refrained from conducting any Open Market Operations (OMO) for a fifth consecutive day despite market liquidity ending the year in the negative.

An amount of Rs 7 billion was deposited at its repo window rate of 7.50% while an amount of Rs 14.57 billion was accessed from its discount window of 9.50% brining overall liquidity to a net deficit of Rs 7.56 billion yesterday. Overnight call money and repo rates remained unchanged to average 9.83% and 9.02% respectively.

Secondary market yields steady subsequent to Inflation

Activity in secondary bond markets continued to remain lackluster yesterday with yields holding steady even as inflation on a point to point basis reflected a decrease to 9.20% against its previous months figure of 9.50%. However on an annualized basis this reflected an increase to 7.60% against its November figure of 7.20%.

A limited amount of activity was witnessed on secondary market bills mainly centering on the 364 day bill at levels ranging from 11.55% to 11.65%. Given below are the closing, secondary market yields for the most frequently traded maturities.

Rupee dips in intraday trading

The rupee closed the year at Rs 127.90, down subsequent to opening the day at levels of Rs 127.15 on the back of thin volumes. This reflected an annualized depreciation of 10.95% on the rupee for the year. The total USD/LKR volume for the previous working day (28-12-12) was US $ 21.05 million. Some forward dollar rates that prevailed in the market were 1 Month – 128.90; 3 Months- 130.80 and 6 Months- 133.35