Weekly Treasury bill averages continue to decrease

By Wealth Trust Securities

The weighted averages of the 182 day and 364 day maturities continued to decrease at yesterday’s weekly Treasury bill auction for a third consecutive week, with the total offered amount of Rs. 30.5 billion being fully subscribed. 

Both maturities recorded a decrease of 10 basis points each to 10.43% and 10.73% respectively while the 91-day bill was not offered for a second consecutive week. Given below are the details of the auction.

In the secondary bond market, yields were seen increasing marginally ahead of today’s monetary policy announcement, which is due at 7.30 a.m., the third for 2017. The Central Bank of Sri Lanka increased its policy rates by 25 basis points at the last monitory policy meeting held in March 2017.

Activity moderated during the day with the liquid maturities of 01.07.19, 01.03.21, 15.12.21, 01.01.24, 01.08.24 and 01.08.26 hitting intraday highs of 11.05%, 11.30%, 11.35%,  11.50%, 11.55% and 11.65% respectively when compared against its previous day’s closing levels of 10.85/95, 11.05/15 11.10/20, 11.35/45, 11.40/45 and 11.45/50.

Meanwhile, today’s Treasury bond auction, in lieu of a Treasury bond maturity of Rs. 97.13 billion due on 15th May, will have on offer a total amount of Rs. 94 billion consisting of Rs. 31 billion each of the 4.07 year maturity of 15 December 2021 and a new six-year maturity of 15 May 2023. 

A further Rs. 17 billion will be offered consisting of an 8.03 year maturity of 01.08.2025 and Rs. 15 billion of a 1.08 year maturity of 15.01.2019. The previous auction of these exact maturities, excluding the new maturity of 15 May 2023 recorded weighted averages of 11.55%, 11.87% and 11.21% respectively.

The total secondary market Treasury bond transacted volume for 5 May 2017 was Rs. 11.4 billion.

Given below are the closing, secondary market yields of the most frequently traded T-bills and bonds.

Meanwhile in money markets, the overnight call money and repo rates averaged 8.75% and 8.82% respectively as the OMO (Open Market Operations) Department of the Central Bank of Sri Lanka injected an amount of Rs. 11.00 billion on an overnight basis by way of a Reverse Repo auction at a weighted average of 8.75%. The net liquidity shortage decreased to Rs. 8.35 billion.

Rupee losses marginally  

 In the Forex market, the USD/LKR rates on spot next as well as two week forward contracts were seen depreciating marginally to close the day at Rs. 152.80/85 and Rs. 153.13/20 respectively against its previous day’s closing levels of Rs. 152.60/75 and Rs. 153.00/10, on the back of importer demand.

 The total USD/LKR traded volume for 5 May 2017 was $ 74.65 million.

 Given below are some forward USD/LKR rates that prevailed in the market.