Thursday, 24 October 2013 00:00
By Wealth Trust Securities
As expected following the policy rate cut of 50 basis points, the weighted averages at yesterday’s weekly Treasury bill auction dipped across the board to hit a twenty (20) month low.
The 182-day bill WAvg dipped by 49 basis points (bp) to 9.11%, the 364-day bill by 47 bp to 10.02%, recording levels last seen in February 2012, while all bids for the 91-day bill were rejected. The total accepted amount at the auction was lower at Rs. 7.8 billion in comparison to its total offered amount of Rs. 8 billion.
Activity in secondary bond markets continued to be very high yesterday as yields closed the day lower against its previous day’s closings, driven by the outcome of the weekly Treasury bill auction. The bulk of the activity was mainly seen on 1 January 2017 and 1 April 2018 maturities, from an opening high of 10.85% and 11.10% respectively to lows of 10.75% and 11.02%.
In addition, a limited amount of activity was witnessed on the two year maturity within a daily low of 10.25% to a high of 10.40% and the three-year maturity with 10.48% to 10.55%.
In secondary bill markets, January 2014 bills were seen changing hands within the range of 8.20% to 8.40%, May 2014 within 9.20% to 9.30%, June 2014 within 9.35% to 9.40%, August 2014 within 9.65% to 9.75% and the latest 364-day bill within 9.90% to 9.95% subsequent to the release of the auction results.
The Open Market Operations (OMO) department of the Central Bank continued to mop up liquidity on a seven-day basis at a WAvg of 7.45% for an amount of Rs. 4.1 billion while a further Rs. 12.10 billion was seen been deposited at its window rate of 6.50% resulting in a total surplus of Rs. 16.2 billion yesterday.
Overnight call money and Repo rates remained steady to average 7.84% and 7.10% respectively.
Rupee continues its positive trend
The USD/LKR rate gained for a fourth consecutive day to close the day at Rs. 130.75/78 against its previous day’s close of Rs. 130.85/90 on continued dollar inflows into the system and export conversions outweighing importer demand. The total USD/LKR traded volume for the previous day (22 October 2013) stood at $ 58.05 million.
Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 131.60, 3-Months: Rs. 133.20 and 6-Months: Rs. 135.70.