364-day bill weighted average increases to 2-year high

• Weekly averages increase for 5th consecutive week
• Money market rates increase to 3-month high

By Wealth Trust Securities

The weighted averages at yesterday’s weekly Treasury bill auction were seen increasing for a fifth consecutive week with the 364-day maturity increasing to a two year high of 7.42%, reflecting an week-on-week increase of 12 basis points. 

This was closely followed by the 91-day and 182-day maturities increasing by 14 and 10 basis points respectively to 6.59% and 6.93%. 

The auction drew only Rs. 7 billion in successful bids against a total offered amount of Rs. 18 billion with the 91 day maturity representing 62.85% of the accepted amount. In addition, the total bids received to offer ratio was seen increasing to 2.07:1 this week against its last week’s four-month low of 1.96:1.

In money markets yesterday, the interbank call money rate was seen increasing to a three month high of 6.55% yesterday to average 6.54% against its previous day’s average of 6.45% while the repo average increased to 6.38% as well against 6.29% recorded the previous day. 

Furthermore, the OMO (Open Market Operation) department of Central Bank continued to drain out surplus liquidity in the market, which was recorded at Rs. 79.37 billion yesterday as it mopped up a further amount of Rs. 6.10 billion for 14 days at a weighted average rate of 6.45%.

In the secondary bond market, the liquid maturities of 1 November 2019, 15 December 2020 and 1 September 2023 were seen changing hands within the range of 9.55% to 9.65%, 9.65% to 9.70% and 9.50% to 9.55% respectively yesterday on the back of thin volumes. 

Rupee appreciates further 

 Meanwhile in Forex markets, the rupee on spot contracts appreciated further yesterday to close the day at Rs. 143.95/05 against the previous day’s closing levels of Rs.144.25/35 on the back of inward remittances and export conversions outweighing importer demand. 

The total USD/LKR traded volume for 5 January was $ 71.25 million. Given below are some forward USD/LKR rates that prevailed in the market: one month – 144.50/75; three months – 145.70/80; and six months – 147.55/65.