Secondary market bond yields edge up marginally in dull trade

Wednesday, 6 May 2015 00:32 - - {{hitsCtrl.values.hits}}

All bids for 2.09-year maturity Treasury Bonds rejected

By Wealth Trust Securities Secondary market bond yields were seen edging up marginally yesterday in very thin trade, following a mixed outcome at the two Treasury bond auctions. At the auctions, all bids for the 2.09-year maturity of 01.02.2018 were rejected while the 5.0 year maturity of 01.05.2020 recorded a weighted average of 8.46%, marginally higher than its secondary market. A very limited amount of activity was witnessed on the liquid maturities of 01.06.2018, 01.07.2022 and 01.09.2023 at levels of 8.00%, 8.60% and 8.78% to 8.80% respectively. This was ahead of today’s weekly Treasury bill auction, where a total amount of Rs. 25 billion will be on offer, consisting of Rs. 3 billion on the 91-day, Rs. 7 billion on the 182-day and Rs. 15 billion on the 364-day maturities. At last week’s auction, weighted averages dipped across the board to record 6.15%, 6.32% and 6.39% respectively. Meanwhile, in money markets, overnight call money and repo rates remained mostly unchanged to average 6.11% and 5.98% respectively as surplus liquidity remained high at Rs.126.56 billion yesterday. Rupee remains mostly unchanged The dollar/rupee rate remained mostly unchanged to close the day at Rs. 134.80/00 yesterday on its one-month forward contract. The total USD/LKR traded volume for 30 April was at $ 18.38 million. Some of the forward dollar rates that prevailed in the market were 3 months - 135.90 and 6 months - 137.65.

Rupee forwards steady on CB moral suasion amid imports

Reuters: Rupee forwards ended steady in dull trade on Tuesday as the Central Bank’s moral suasion kept the local currency unchanged despite importer dollar demand, while dealers expect the rupee to remain under pressure on lower interest rates. The Central Bank on Thursday allowed the spot rupee to fall for the first time in two months. The stock and foreign exchange markets were closed on Friday for May Day and on Monday for a Buddhist religious holiday. Actively quoted one-month forwards ended steady at 134.90/135.00 as the Central Bank prevented it being traded below 134.90. “The import demand is there and the rupee is under pressure as imports are picking up and the exporters are reluctant to sell (dollars),” said a currency dealer asking not to be named. On Thursday, the central bank allowed a 10-cent fall in the spot rupee to 133.00 per dollar after holding it at 132.90 since February, when it set the level beyond which it would not allow the currency to fall. Dealers, however, said the spot rupee did not trade on Tuesday as the central bank did not allow trades below 133.00. Dealers said the central bank has been keeping the spot rupee and all forwards up to one-month steady through moral suasion. Central Bank officials were not available for comment. The exchange rate is under pressure after the central bank slashed its key monetary policy rates on 15 April and market interest rates have been on a falling trend since then. Yields on treasury bills fell 3 to 11 basis points (bps) at last week’s auction, extending their decline to 41-51 bps since the rate cut. Two-week and one-week forwards ended steady at 133.90/134.00 and 133.60/70 per dollar respectively.