3-month Treasury bill average continues to slide down

• Secondary Bond Market activity remains moderate
• Rupee recovers marginally 

 

By Wealth Trust Securities

This week’s Treasury bill auction conducted yesterday, continued its bullish momentum, mainly on the 91-day bill as its weighted average dipped by 20 basis points to 16.10% on the back of Rs. 114.15 billion bids received for an offered amount of Rs. 60 billion. The 182-day bill trickled down by 01 basis point, to record a weighted average of 14.93%, while the 364-day bill average remained unchanged at 13.02%. The total bids received was 2.08 times greater than the total offered amount.

An amount of Rs. 116.50 billion or 86.30% was raised of the total offered amount of Rs. 135 billion at the 1st phase of the auction. The 2nd phase of subscription, for all three maturities will be opened until 4:00 p.m. on the day before the settlement date (i.e., 26.10.2023) at the weighted averages determined at the 1st phase of the auction. Given below are the details of the 1st phase of the auction:

The secondary bond market continued to see subdued activity with yields edging up. Trading was seen on the liquid 2026 tenor bonds of 01.06.26 and 01.08.26 at the rate of 14.95% while the 01.05.24 and 01.07.28 maturity saw yields edge up further from 15.10% to 15.20% and 14.75% to 14.80% respectively.

In secondary market bill transactions February 2024 maturities were seen changing hands at 16.00%.

The total secondary market Treasury Bond/Bill transacted volume for 24 October was Rs.6.06 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 10.35% and 10.58% respectively while the net liquidity stood at a deficit of Rs. 76.03 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 49.35 billion at a weighted average rate of 10.14%. An amount of Rs. 26.78 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 11.00% while an amount of Rs. 0.10 billion was deposited at the Central Banks SDFR (Standard Deposit Facility Rate) of 10.00%.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day by recovering slightly to Rs. 326.50/327.00 against its previous day’s closing level of Rs.327.40/327.80.

The total USD/LKR traded volume for 24 October was $ 37.45 million. 

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)