Secondary market activity picked up along with Treasury bill auction

Central Bank’s borrowing costs increased on its 182 day and 364 day bills for a fourth consecutive week at its weekly treasury bill auction held yesterday, while the weight average (WAY) on the 91 day bill remained steady. The increases were 5 bp and 9 bp respectively as 62% of the total accepted volume was represented from the 182 day bill, reflecting markets shift in appetite to this maturity.

Activity in secondary bond markets picked up yesterday, as yields edged up during the early part of the day by around 5 basis points across the yield curve on expectations of the outcome of the bill auction and remained at those levels subsequent to the auction as buying interest set in. Volumes were seen changing hands on the three year, five year and six year maturities at levels of 12.60% to 12.65%, 12.70% to 12.75% and 13.20% to 13.25% respectively. In secondary market bills, activity was seen taking place on the 91 day bill at its WAY of 10.68% while October 2013 bills were seen changing hands within the range of 12.61% to 12.66%.

In money markets, an amount of Rs 3 Bn was accessed from Central bank’s discount window of 9.75% yesterday as overnight net liquidity was a deficit of Rs 2.9 Bn. Overnight call money and repo rates remained steady to average 10.54% and 9.64% respectively.

Rupee dips close to Rs. 131

The rupee dipped to an intraday low of Rs 130.90 yesterday subsequent to opening at levels of Rs 130.70 on continued importer demand. The total USD/LKR traded volume for the previous day (06-11-12) stood at US $ 48.16 million. (Source: Wealth Trust Securities)