364-day bill average decreases once again

By Wealth Trust Securities

The 364-day bill weighted average at yesterday’s weekly Treasury bill auction decreased once again after a lapse of one week as the total bids to offer ratio was seen increasing to a four week high of 3.64:1. 

A 10-basis point drop was recorded on the 364 day bill to 8.80% while the 182 day bill recorded a steeper drop of 18 basis points to 8.06%. The total offered amount of Rs. 22.5 billion was successfully subscribed for at the auction.

In the secondary bond market yesterday, yields were seen decreasing further on the back of continued buying interest. Activity centered on the maturities of the three 2021’s (i.e. 01.03.21, 01.05.21 and 01.08.21), the two 2026’s (i.e. 01.06.26 and 01.08.26) and the 15.06.27 as its yields dipped to intraday lows of 9.12%, 9.15% each, 9.48% each and 9.50% respectively against its previous day’s closing levels of 9.20/25, 9.25/30, 9.25/35, 9.60/65, 9.60/62 and 9.62/68. 

On the short end of the curve, the 15.09.19 and 01.05.20 maturities were seen changing hands at levels of 8.90% to 8.95% and 9.10% respectively as well.

The total secondary market Treasury bond/bill transacted volumes for 9 January 2018 was Rs. 12.35 billion.

In money markets, the overnight call money and repo rates averaged 8.06% and 7.61% respectively as the net surplus liquidity in the system stood at Rs. 49.65 billion yesterday.

The Open Market Operations (OMO) Department continued to drain out excess liquidity by way of repo auctions. The auctions drained an amount of Rs. 67 billion in total at weighted averages of 7.25% for overnight, 7.28% for two days, 7.40% for eight days and 7.48% for 15 days. 

Rupee steady

The USD/LKR rate on spot contracts closed the day steady at Rs.153.70/80 as the market was at equilibrium. The total USD/LKR traded volume for 9 January 2017 was $ 94.25 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 154.50/65; three months - 156.10/25 and six months - 158.55/70.