Weekly weighted averages increase to highest levels in 20 weeks

Thursday, 12 February 2015 00:00 - - {{hitsCtrl.values.hits}}

Liquidity dips to lowest level for the year

The weighted averages (WAvg’s) at the weekly Treasury bill auction were seen increasing to its highest levels in 20 weeks yesterday to record 5.88%, 5.98% and 6.10% respectively.

This reflected an increase of six basis points (bp) on the 91 day, 8 bp on the 182 day and 5 bp on the 364 day maturities respectively against its previous weeks Wavg’s. The total accepted amount exceeded the total offered amount of Rs. 12 billion by Rs. 1.74 billion as the shorter two durations accounted for 87.37% of the total accepted amount. Meanwhile, in secondary bond markets, yields were seen increasing yesterday, mainly on the two-year duration of 15.05.2017 to 7.10%, the two three-year durations (01.04.2018 & 15.08.2018) to 7.17% and 7.22% respectively, the six-year duration of 01.05.2021 to 7.72% and the seven-year duration of 01.07.2022 to 7.73%.

Furthermore in secondary bill markets, considerable selling interest leading to the auction saw July and September 2015 durations changing hands within the range of 6.05% to 6.10% and 6.10% to 6.20% respectively. However, buying interest at these levels subsequent to the release of the auction results curtailed any further upward movement. Surplus liquidity dips to lowest level for the year In money markets yesterday, surplus liquidity was seen dipping to Rs. 3.31 billion yesterday, the lowest level for the year this far. This in turn saw overnight call money and repo rates remain high to average 6.48% and 6.40% respectively as no Open Market Operations (OMO) were conducted for a third consecutive day.

Rupee remains stagnant The USD/LKR rate on spot contracts continued to remain stagnant at Rs. 132.80–Rs. 133.00 yesterday while spot next (Five-day forward), spot next-next (six-day forward) and one-week forward contracts remained steady as well at levels of Rs. 132.90/10, Rs. 132.92/12 and Rs. 132.98/18 respectively due to the two cents per day forward premium limit as markets remained inactive. The total USD/LKR traded volume for 10 February was at $ 29.85 million. Some of the forward USD/LKR rates that prevailed in the market were one month - 133.40; three months - 134.40 and six months -136.10.