Secondary bond market yields increase ahead of weekly Treasury bill auction

By Wealth Trust Securities

Selling interest in the secondary bond market resulted in yields of the liquid maturities consisting of 01.01.24, 15.03.35 and 01.06.26 increasing to intraday highs of 12.60%, 12.70% and 12.80% respectively as against its previous day’s closing levels of 12.45/50, 12.50/60 and 12.50/60.

On the shorter end of the yield curve, two-way quotes of the 15.11.18 and 15.09.19 maturities were also seen increasing to levels of 11.40/50 and 11.70/75 as well. The announcement of four further Treasury bond auctions scheduled for Friday, 8 July supported the upward movement.

This week’s Treasury bill auction, which will be held today, will have on offer a total amount of Rs.22 billion, consisting of Rs.8.5 billion each of the 91 day and 182 day maturities and a further amount of Rs.5 billion of the 364 day maturity. At last week’s auction, weighted averages of the 91 day and 182 maturities increased by 02 and 03 basis points respectively to 8.88% and 9.86% while the weighted average of the 364 day maturity remained unchanged at 10.55%.

Meanwhile in money markets, the overnight call money and repo rates averaged 8.20% and 8.03% respectively as the Open Market Operations (OMO) Department of the Central Bank injected an amount for Rs.18 billion at a weighted average rate of 7.99%.

Rupee dips further

 The USD/LKR rate on active one week forward contracts depreciated for a second consecutive day to close the day at Rs.146.90/20 against its previous day’s closing levels of Rs.146.55/85.

The total USD/LKR traded volume for 1 July was $ 64.75 million.

Some of the forward USD/LKR rates that prevailed in the market were one month – 147.50/80; three months – 149.15/30 and six months – 151.45/60.