Rs. 93 b Treasury bill auction in focus

• Bond yields increase further
• Inflation skyrockets to 45.3%

By Wealth Trust Securities

The weekly Treasury bill auction due today will see a total volume of Rs. 93 billion on offer consisting of Rs. 40 billion on the 91 day maturity, Rs. 25 billion on the 182 day maturity and a further Rs. 28 billion on the 364 day maturity. 

At last week’s auction, weighted average rates decreased across the board for a fourth consecutive week by 118, 99 and 109 basis points on the 91 day, 182 day and 364 day maturities respectively to 20.73%, 21.90% and 22.04%.

Meanwhile, yields in the secondary bond market continued to increase on the back of moderate activity yesterday. The liquid 01.06.25, 01.05.27 and 15.01.28 maturities hit highs of 21.60%, 21.25% and 21.00% respectively against its previous day’s closing levels of 20.40/75 each.

In the meantime, the National Consumer Price Index (NCPI) for the month of May was seen spiking to a high of 45.3% at its announcement yesterday in comparison to its previous month of 33.8%. 

The annual average also increased to 16.3% against 13.0%.

The total secondary market Treasury bond/bill transacted volume for 20 June was Rs. 6.68 billion.    In money markets, the net liquidity deficit stood at Rs. 511.12 billion yesterday as an amount of Rs. 193.50 billion was deposited at Central Bank’s Standard Deposit Facility Rate (SDFR) of 13.50% against an amount of Rs. 704.62 billion withdrawn from Central Bank’s Standard Lending Facility Rate (SLFR) of 14.50%. The weighted average rates on overnight Call money and REPO stood at 14.50% each.

Forex market 

In the forex market, the middle rate for USD/LKR spot contracts depreciated further to Rs. 361.75 yesterday against its previous day’s Rs. 360.75.

The total USD/LKR traded volume for 20 June was $ 0.04 million.  

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