364-day bill Weighted Average increases marginally

• Rs. 60 billion on offer on Treasury bonds

By Wealth Trust Securities

The market favorite 364-day bill weighted average yield was seen increasing once again at its weekly auction held yesterday, reversing its downward movement witnessed over the past two weeks. 

It recorded a marginal increase of two basis points to 8.48% while the 182-day bill weighted average increased by two basis points as well to 8.01%. The weighted average yield on the 91-day bill remained steady at 7.41%. The total offered amount of Rs. 32 billion was successfully met at the auction, as the bids to offer ratio stood at 2.65:1. 

This was ahead of today’s Treasury bond auctions, where an total amount of Rs. 60 billion will be on offer, consisting of Rs. 17.5 billion on a two-year and seven-month maturity of 1.10.2022, Rs. 20 billion on a four-year and six-month maturity of 15.9.2024 and a further Rs. 22.5 billion on a seven-year and seven-month maturity of 15.10.2027. The weighted average yields at the auctions conducted on 30 January 2020 for the maturities of 15.09.2024 and 15.10.2027 were recorded at 9.27% and 9.40% respectively.

In the secondary bond market, yields were seen increasing further yesterday, mainly on the belly end of the curve on the back of moderate activity. The yields on the maturities of 1.6.26 and 15.10.27 increased to intraday highs of 10.10% and 10.08% respectively against its previous day’s closing levels of 9.95/05 and 9.85/05. In addition, maturities of 1.8.21, 1.10.22, 1.9.23, 1.8.24 and 1.5.29 were traded at levels of 8.60% to 8.88%, 9.30%, 9.60%, 9.75% to 9.90% and 10.10% respectively as well.

The total secondary market Treasury bond and bill transacted volume for 10 March 2020 was Rs. 18.28 billion.  

In money markets, weighted average yields on overnight call money and repo rates remained steady at 7.00% and 7.03% respectively as the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka refrained from conducting any auction for a second consecutive day. The overnight net liquidity surplus in the system was recorded at Rs. 35.71 billion yesterday.

Rupee closes mostly unchanged

In the Forex market, the USD/LKR rate on spot contracts was seen closing the day mostly unchanged at Rs. 182.55/60 yesterday subsequent to gaining to an intraday high of Rs. 182.38. 

The total USD/LKR traded volume for 10 March 2020 was $ 102.00 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 183.00/15; three months - 183.85/05 and six months - 185.40/70.

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