364 day bill weighted average continues to tumble

• Secondary market bond yields retreat once again

By Wealth Trust Securities

The downward trend in the 364 day bill weighted average was seen continuing at yesterday’s weekly Treasury bill auction for a fifth consecutive week. It recorded a drop of 05 basis points to 10.70% while the weighted average on the 182 day bill remained steady at 9.87%. The total offered amount of Rs. 23.5 billion was fully met as the bid to offer ratio stood at 2.48:1.   

The secondary bond market yields were seen decreasing yesterday mainly on the very short end of the curve. Considerable buying interest on the 01.05.20 and 01.03.21 maturities saw its yields dip to daily lows of 10.61% and 10.70% respectively in the morning hours of trading against its days opening highs of 10.66% and 10.75%. In addition, the two 2023s (i.e. 15.05.23 and 15.12.23) saw its yields dip to daily lows of 11.25% each from its opening highs of 11.28% and 11.31%. Furthermore, the maturities of 15.03.25, two 2026s (i.e. 01.06.26 and 01.08.26), 15.06.27 and 01.09.28 were seen changing hands at levels of 11.42%, 11.45%, 11.42% to 11.47%, 11.45% and 11.48% respectively as well. 

The total secondary market Treasury Bond/Bills transacted volume for 22 January was Rs. 6.41 billion. 

In the money market, the OMO Department of Central Bank infused liquidity by way of an overnight reverse repo auction for a successful amount of Rs. 40 billion at a weighted average yield of 9 % as the net liquidity shortfall reduced further to Rs. 128.77 billion yesterday. The overnight call money and repo rates averaged 8.99% and 8.97% respectively.

 

Rupee remains mostly unchanged 

Meanwhile in Forex markets, the USD/LKR rate on spot contracts remained mostly unchanged to close the day at Rs. 182.10/25.

The total USD/LKR traded volume for 22 January was $65.00 million.

Some forward USD/LKR rates that prevailed in the market: 1 month - 183.10/40; 3 months - 185.00/30; 6 months - 187.85/15.