Positive outcome at historical auction  

• Bond market activity at moderate pace
• Rupee strengthens to Rs. 306

By Wealth Trust Securities Ltd 

The historical Treasury bill auction conducted yesterday reflected a positive outcome as weighted averages decreased across the board on all three maturities while the total offered amount of Rs. 180 billion was fully subscribed at the 1st phase of the auction.

The drop in averages which was seen for the first time in six weeks was led by the 364-day and 91-day bills as it recorded declines of 35 and 33 basis points respectively, followed by 182-day bill by 20 basis point to 25.22%.

The 2nd phase of the auction will be opened on three maturities at its weighted average rates until close of business of the day prior to settlement (i.e., 3.30 pm on 18.05.23). Given below are the details of the auction, Meanwhile, activity in the secondary bond market was moderate yesterday as most market participants continued to be on the sidelines. Limited trades were seen on the 15.01.25 and 15.07.29 maturities at levels of 29.50% to 29.56% and 25.00% respectively.

The total secondary market Treasury bond/bill transacted volume for 16th May 2023 was Rs. 14.61 billion. In money markets, the net liquidity shortfall stood at Rs. 41.59 billion yesterday as an amount of Rs. 31.46 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 15.50% against an amount of Rs. 73.05 billion being withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 16.50%. The weighted average rates on overnight call money and REPO stood at 16.48% and 16.50% respectively.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts traded at a high Rs. 306.00 yesterday before closing the day at Rs. 305.80/306.20 against its previous day’s closing level of Rs. 309.00/309.80.

The total USD/LKR traded volume for 16 May was $ 106.00 million.  

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)