Money market liquidity drops to a two month low

Friday, 22 March 2013 00:59 -     - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Money market liquidity on an overnight basis dipped to a two month low of Rs.8.18 Billion yesterday with only an amount of Rs 4.75 billion been mopped up from the system on an overnight basis by way of a Repo auction conducted by the Open Market Operations (OMO) department of Central Bank at a WAvg of 8.35%. However overnight call money and repo rates remained mostly unchanged to averaged 9.46% and 8.59% respectively.

A foreign exchange swap at where rupees are drained out of the system was seen as the reasons behind the dip in liquidity once gain according to market sources.

In secondary bond markets, the upward movement of bond yields experienced in the secondary market driven by Wednesday’s Treasury bill auction results which saw weighted averages increased across the board reversed, with the 5 year Treasury bond yields reflecting a dip of 7 basis points to hit an intraday low of 11.38% while quotes on the 4 year maturity was at levels of 11.40%. On the contrary, in secondary market bills, selling pressure was witnessed on all three maturities above its respective weighted averages.

Rupee continues to slip

The rupee dipped further by 20 cents yesterday to close the day at Rs 126.97 on the back of demand for contracts value cash and tom. The total USD/LKR traded volume for the previous day (20-03-13) stood at US $ 58.92 million. Given below are some forward dollar rates that prevailed in the market,