Weekly averages increase for fourth consecutive week

• Secondary bond market yields edge up on moderate activity
• Rupee appreciates further

By Wealth Trust Securities

At the weekly Treasury bill auction conducted yesterday, the weighted average yields were seen increasing across all three maturities, for a fourth consecutive week. The 91-day maturity increased by 13 basis points to 10.23%, the 182-day maturity increased by 14 basis points to 10.35%, while the 364-day maturity also went up by 14 basis points to stand 

at 10.38%.

The auction went undersubscribed for a second consecutive week, with only 90.19% or Rs. 139.80 billion out of the Rs. 155.00 billion offered raised at the 1st phase of the auction.

The 2nd phase of subscription, for only the 182- and 364-day maturities will be opened until 4:00 pm on the day before the settlement date (i.e., 21.03.2024) at the respective weighted averages determined at the 1st phase of the auction. 

The secondary bond market yesterday witnessed subdued activity and overall moderate volumes transacted, apart from a few selected maturities. Trades were focused on a few selected maturities with a particular emphasis on tenors from 2024-2028. In particular the 15.12.28 maturity saw yields increase from intraday lows of 12.10% to intraday highs of 12.18%, on the back of substantial volumes. Similarly, the 01.05.24 maturity also traded with substantial volumes being transacted at the rate of 10.10%. While the 01.05.27 maturity was seen trading at 11.80% and the 15.12.26 was observed trading within the range of 11.32% to 11.35%, on the back of moderate volumes. The medium tenor 01.07.32 maturity was seen trading at 12.30%. Two-way quotes were seen edging up after the release of the Treasury Bill auction results.

The total secondary market Treasury bond/bill transacted volume for 19 March was Rs. 12.15 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 9.16% and 9.33% respectively while the net liquidity deficit stood at Rs. 37.30 billion yesterday. An amount of Rs. 6.14 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 10.00% against an amount of Rs. 19.14 billion deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 9.00%. The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight repo auction for Rs 50.30 billion at the weighted average rate 

of 9.09%.

Forex Market

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

appreciating to 

Rs. 304.00/304.20 against its previous day’s closing level of Rs. 303.95/304.05.

The total USD/LKR traded volume 

for 19 March was $ 127.63 million.

(References: Central Bank of 

Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)