Activity dries up ahead of inflation announcement

Friday, 31 January 2014 01:11 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Activity in the secondary Treasury bill and bond markets was somewhat stagnant with a limited amount of trades consisting of the two 2018 maturities (i.e. 1 April 2018 and 15 August 2018), at increased yields of 9.15% and 9.20%. In the meantime maturities consisting of the 1 January 2017 and 1 May 2021 were quoted at levels of 8.30%-8.40% and 9.10%-9.25% respectively. The 91 day, 182 day and 364 day bills continued to remain at levels of 6.75/85, 6.95/00 and 7.08/14 respectively. The announcement on inflation for the month of January is due during the latter part of the day. Inflation figures for the last month reflected a sharp decline, where the point to point dropped to a 22 month low of 4.7% and the annualised average dipped to a fourteen month low of 6.9%. In money markets, the total surplus volume of Rs. 35.265 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) of 6.50% as they refrained from conducting any auctions under its Open Market Operations (OMO). However the OMO department was seen conducting a term repo auction for an amount of Rs. 25 b in total for a period of 28 days and 56 days, attracting bids for an amount of Rs. 12.2 b at WAvgs of 6.74%. Overnight call money and repo rates remained steady to average 7.35% and 6.69% respectively. Rupee appreciates further Meanwhile, in Forex markets, the rupee gained further to close the day at levels of 130.67/72 on the back of export conversions outweighing importer demand. The total USD/LKR traded volume for the previous day (29 January 2014) stood at US$ 49.70 million. Some forward dollar rates that prevailed in the market were: one month – 131.05; three months – 131.80; and six months – 133.05.

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