Yields dip marginally ahead of weekly bill auction

Wednesday, 20 March 2013 00:29 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary market for Treasury bills and bonds was rather stagnant yesterday, with a limited amount of activity witnessed on the liquid two five year maturities (i.e.01.04.2018 and 15.08.2018), as its yields dipped during the latter part of the day to an intraday low of 11.35%.

Furthermore the four year maturity saw trades take place within the range of 11.38% to 11.40% as well. On the contrary, in secondary market bills, selling pressure was witnessed on all three maturities above its respective weighted averages.

Today’s treasury bill primary auction will have on offer a total amount of Rs 15 Bn, consisting of Rs 2 Bn of the 91 day bill, Rs 3 Bn of the 182 day bill and a further Rs 10 Bn of the 364 day bill. The weighted averages on all three maturities picked up by 5 basis points each at last week’s auction to levels of 9.16%, 10.15% and 11.19% respectively.

Liquidity down to a one month low (subhead)

Meanwhile, overnight call money and repo rates continued to remain steady to average 9.43% and 8.54% respectively, despite market liquidity reducing to a one month low of Rs 17.4 Bn yesterday. A foreign exchange swap at where rupees are drained out of the system was seen as the reason behind the dip in liquidity according to market sources. An amount of Rs. 13.03 billion was mopped up on an overnight basis by way of a Repo auction at a WAvg of 8.35%

Rupee depreciates further (Subhead)

The Dollar/Rupee rate depreciated further yesterday to close the day at Rs 126.58 in comparison to its previous day’s closing of Rs.126.30 on the back of importer demand. The total USD/LKR traded volume for the previous day (15-03-13) stood at US $ 91.46 million. Given below are some forward dollar rates that prevailed in the market, 1 Month - 127.74; 3 Months - 129.68 and 6 Months - 132.68.