Secondary market bond yields steady ahead of monetary policy announcement

Friday, 21 March 2014 04:39 - - {{hitsCtrl.values.hits}}

Activity in secondary bond markets moderated yesterday as yields were seen closing the day steady ahead of today’s monetary policy announcement. Wealth Trust Securities said a limited amount of activity was witnessed on the four year maturity of 1 April 2018 within the range of 9.03% to 9.06%, the five year maturity of 1 July 2019 at 9.47% and the seven year maturity of 1 May 2021 within 10.20% to 10.22%. However, yields on the shorter tenure durations of one year and two years were seen increasing to levels of 7.10% to 7.20% and 7.50% to 7.70% respectively. In secondary bill markets, November 2014 bills were seen changing hands within the range of 6.90% to 6.93% followed by December 2014 bills within the range of 6.95% to 6.98%. The Open Market Operations (OMO) department of Central Bank successfully drained out a total amount of Rs. 15.65 b by way of three term Repo auctions yesterday for 14 days at a weighted average (WAvg) of 6.67%, 35 days at 6.77% and 56 days at 6.80%. Overnight call money and Repo rates remained steady to average 6.87% and 6.40% respectively as surplus liquidity stood at Rs. 6.12 b. Meanwhile, the rupee remained steady for a third consecutive day to close the day at Rs. 130.60/65 yesterday on the back of thin volumes. The total USD/LKR traded volume for the previous day (19 March 2014) stood at US$ 43 million. Some of the forward dollar rates that prevailed in the market were: one month – 131.20; three months – 132.23; and six months – 133.68.