Treasury prices dip for a fourth consecutive day

Friday, 7 March 2014 04:26 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Treasury bond prices, which move inversely to yields (prices drop as yields increase) was down for a fourth consecutive day on the back of continued selling interest and lack of demand. Once again activity continued to center on the liquid two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) as it was seen hitting intraday highs of 8.95% and 9.05% respectively to close the day at levels of 8.91/93 and 9.00/05. In addition the maturities of 15 July 2017, 15 January 2019, 1 November 2019 and 1 May 2021 were quoted at levels of 8.42/55, 9.08/15, 9.35/45 and 10.00/10 respectively as well. Meanwhile in money markets, all bids were rejected on the planned two auctions for outright sales of Treasury bills by the Open Market Operations (OMO) department of the Central Bank while a total amount of Rs. 41.92 b was drained out by way of three term repo auctions for durations of 28 days at a weighted average (WAvg) of 6.72%, 49 days at a WAvg of 6.76% and 63 days at a WAvg of 6.79% respectively in addition to a Rs. 6.44 b on an overnight basis at a WAVg of 6.54%. Overnight call money and repo rates continued to remain steady to average 6.92% and 6.33% respectively yesterday. Rupee gains for a second consecutive day In dollar rupee markets, the USD/LKR rate gained for a second consecutive day yesterday to close the day at levels of Rs. 130.55/57 on the back of export conversions and inward remittances outweighing importer demand. The total USD/LKR traded volume for the previous day (5 March 2014) stood at US$ 51.30 million. Some of the forward dollar rates that prevailed in the market were: one month – 131.12; three months – 132.10; and six months – 133.62.

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