Secondary market bond yields edge up marginally in thin trade

Friday, 10 October 2014 09:57 - - {{hitsCtrl.values.hits}}

Secondary market bond yields were seen edging up marginally yesterday in thin trade mainly on the shorter end of the yield curve.

Selling interest on the three year maturity of 15 May 2017 saw its yield edge up to an intraday high of 6.70% against its days opening level of 6.60%. This in turn saw yields on the 1 April 2018 edge up to 6.75%, the 1 July 2019 to 6.80% and the 1 July 2022 to 7.45%. However, buying interest at these levels curtailed any further upward movement. It was widely observed that the reason for the increase in yields was due to the rare phenomenon of the weighted average in market repurchase transactions been considerably higher than the weighted average on call money transactions over the past two days. In money markets, the weighted average on overnight call money and repo rates increased to 6.17% and 6.45% respectively yesterday as surplus liquidity moderated to a 38-day low of Rs. 18.06 billion.

Furthermore, the Open Market Operations (OMO) department of Central Bank was seen draining an amount of Rs. 11.20 billion by way of two term repo auctions for periods of 56 days and 77 days at weighted averages of 6.05% and 6.06% respectively. Rupee dips for a second consecutive day Meanwhile in dollar/rupee markets yesterday, the USD/LKR rate depreciated for a second consecutive day to close the day at Rs. 130.35/42 against its previous day’s closing of Rs. 130.33/36 on the back of importer-led demand. The total USD/LKR traded volume for 7 October was at $ 73.23 million. Some of the forward dollar rates that prevailed in the market were: one month – 130.99; three months – 131.69; and six months – 132.69.

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