Weekly weighted averages plunge below 7% once again
Thursday, 19 March 2015 00:06
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By Wealth Trust Securities
Reversing a trend witnessed in recent primary auctions (Treasury bonds and Treasury bills), the weekly weighted averages at yesterday’s Treasury bill auction were seen plunging to dip below the psychological level of 7.00% once again.
The 182 day bill reflected the sharpest decline of 44 basis points (bp) to 6.87% closely followed by the 364 day bill by 38 bp to 6.99% and the 91 day bill by 31 bp to 6.79%. Interestingly, market appetite was seen shifting to the 364 day duration once again from the 91 day duration as it reflected 46% of the total accepted amount of Rs. 23.90 billion.
In secondary bond markets yesterday, yields were seen dipping considerably leading to the weekly auction and following its outcome as well as activity continued to be very high. Activity centred on the 1 June 2018, 15 September 2019, 1 August 2021, 1 July 2022 and 1 September 2023 maturities as its yields were seen dipping to intraday lows of 8.45%, 8.85%, 9.10%, 8.95% and 9.45% respectively.
However, profit taking at these curtailed the downward movement further. Furthermore, at yesterday’s monitory policy announcement for the month of March, the Central Bank was seen holding policy rates steady for a 14th consecutive month.
In money markets, overnight call money and Repo rates dipped marginally to average 6.68% and 6.74% respectively as surplus liquidity increased to Rs. 60.76 b yesterday.
Rupee gains marginally
In Forex markets, the rupee on two weeks forward contracts gained marginally to close the day at Rs. 133.70/90 in comparison to its previous day’s closing levels of Rs. 133.90/00. The total USD/LKR traded volume for 17 March was at $ 46.05 million.
Some of the forward USD/LKR rates that prevailed in the market were: one month – 134.30; three months – 135.30; and six months – 137.30.
