Weekly averages decrease for a second consecutive week; Rs. 78 b fully subscribed

• Secondary bond market maintains sideways momentum
• Rupee loses ground

By Wealth Trust Securities 

At the weekly Treasury bill auction conducted yesterday, the weighted average yields were seen decreasing across all three maturities for a second consecutive week. The 91-day maturity reduced by 07 basis points to 10.03%, while the 182-day maturity decreased by 05 basis points to 10.22% and the 364-day maturity dropped by 04 basis point to 10.23%. The entire offered amount of Rs. 78.00 billion was taken up at the 1st phase with bid received exceeding the offered amount by 2.5 times.

The 2nd phase of subscription, across all 3 maturities will be opened until 4:00 pm on the day before the settlement date (i.e., 18.04.2024) at the respective weighted averages determined at the 1st phase of the auction. 

Meanwhile, the secondary bond market yesterday continued to remain in a holding pattern on moderate activity. As such yields fluctuated within a narrow band but closed the day flat. Trading continued to be centred on the short end of the yield curve with a particular emphasis on 2025-2028 durations. Accordingly, the liquid 2026 tenors 01.06.26 and 15.12.26 were seen trading within the ranges of 11.15% and 11.34% to 11.32% respectively. Similarly, the 15.03.28 was seen changing hands between intraday highs of 12.15% and intraday lows 12.10%. Additionally, the shorter tenor 01.07.25 bond was seen transacted within the range of 10.60% to 10.55% and the 2027 tenor of 01.05.27 was seen trading at 11.90%.

The total secondary market Treasury bond/bill transacted volume for 16 April was Rs. 15.71 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 8.64% and 8.77% respectively while the net liquidity surplus Rs. 103.87 billion yesterday. An amount of Rs. 2.88 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 9.50% against an amount of Rs. 157.75 billion deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.50%. The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight and 07-day term repo auction for Rs. 20.00 billion and Rs. 31.00 billion at the weighted average rate of 8.60% and 8.74% respectively.

 Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day depreciating to 

Rs. 301.00/302.50 against its previous day’s closing level of Rs. 300.00/300.75.

The total USD/LKR traded volume for 16 April was $ 31.75 million.

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