364-day bill WAvg edges above 6% for first time in 14 weeks

• Inflation increases for first time in 5 months

By Wealth Trust Securities The upward trend in weighted averages (WAvgs) at the weekly Treasury bill auctions continued with the 364-day bill edging up by one basis point for a third consecutive week to move above the physiological level of 6% for the first time in 14 weeks as well. However, all bids received for the 182-day bill were rejected with the 91-day bill WAvg remaining steady at 5.74%. An additional amount of Rs. 3.1 billion was accepted against its initial total offered amount of Rs. 12 billion. Subsequent to the release of the auction results, the decreasing trend in secondary market bond yields witnessed during morning hours of trading was seen reversing with yields on 15 August 2018 and 1 July 2022 increasing to intraday highs of 7.12% and 7.75% respectively against its day’s lows of 7.08% and 7.67% as volumes traded continued to be moderate. Furthermore, the outcome on inflation for the month of December was seen adding momentum to the reversal in the downward trend as the point to point number was seen increasing for the first time in five months to record 2.10% against its previous month number of 1.50%. However, its annualised average was seen decreasing for a 19th consecutive month to 3.20% against its previous month’s number of 3.50%. Meanwhile, in money markets, overnight call money and repo rates increased to average 6.21% and 6.07% respectively as surplus liquidity decreased considerably to a net of Rs. 4.38 billion yesterday.     Rupee stable The USD/LKR rates on spot next and spot next-next contracts were seen closing the year steady at Rs. 132.05/15 and Rs. 132.10/30 respectively. The total USD/LKR traded volume for 30 December was $ 69.00 million. Some of the forward dollar rates that prevailed in the market were: one month – 133.20; three months – 133.80; and six months – 135.10.