Secondary market Treasury yields dip further ahead of weekly auction
Wednesday, 18 December 2013 00:00
By Wealth Trust Securities
Activity in secondary bond markets remained high yesterday as yields dipped during the day with active two way quotes mainly seen on the liquid two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) as it was seen breaking the 10% psychological barrier into single digits for the first time in 23 months.
Furthermore, buying interest on secondary market Treasury bills primarily on the 364 day bill saw it commanding levels of 8.70/90% as the market eagerly awaited the outcome of the weekly Treasury bill auction due today.
At today’s auction, a total amount of Rs.13 billion will be on offer which will consist of Rs. 1 b, Rs. 2 b and Rs.10 b on the 91 day, 182 day and the 364 day maturities respectively. At last week’s auction, weighted averages on all three maturities declined for a 12th consecutive week to 7.85%, 8.48% and 9.15% respectively.
Meanwhile in money markets, overnight call money and repo rates remained steady to average 7.72% and 6.98% respectively despite surplus liquidity dipping to Rs. 13.61 b yesterday. An amount of Rs. 13.61 b was deposited at CBSL’s repo window of 6.50% as the Central Bank refrained from conducting any OMO auctions for the first time six weeks.
Meanwhile in Forex markets, the rupee remained steady to close the day at Rs. 130.80/82. The total USD/LKR traded volume for the previous day (13 December 2013) stood at US$ 52.40 million.
Some of the forward dollar rates that prevailed in the market were: one month – 131.30; three months – 132.26; and six months – 134.21.