364-day bill weighted average yield remains unchanged

• Bond yields fluctuate

By Wealth Trust Securities

The 364-day bill weighted average yield was seen holding steady at 8.88% at the weekly Treasury bill auction conducted yesterday, subsequent to decreasing for five consecutive weeks. 

Similarly, the 182-day bill too remained steady at 8.63% following 11 consecutive weeks of decreases. The 91-day maturity which was accepted after a lapse of two weeks recorded a weighted average rate of 8.38%. The total offered amount of Rs. 20 billion was fully subscribed for at the auction, despite the bids to offer ratio dipping to 2.45:1.  

The secondary bond market in the meantime remained active yesterday, with fresh buying interest during morning hours of trading pushing the yields of the 15.03.24 and 15.01.27 maturities to intraday lows of 10.05%, 10.38% and 10.40% respectively, when compared against its previous day’s closing levels of 10.10/20 and 10.50/60. 

However, the downward momentum came to a halt leading to and subsequent to the announcement of the T-bill auction results and the yields of the said maturities picked up once again to highs of 10.17% and 10.50%. 

Furthermore, maturities consisting of 01.05.20, 01.05.21, 01.08.21, 15.12.21 01.10.22 and 15.03.23 were seen changing hands at levels of 8.90% to 8.92%, 9.48% to 9.50%, 9.53% to 9.60%, 9.57% to 9.65%, 9.85% to 9.92% and 10.00% as well.

The total secondary market Treasury bond/bill transacted volumes for 3 June was Rs. 6.81 billion. 

In the money market, overnight call money and repo rates averaged 7.98% and 8.05% respectively with the net surplus overnight liquidity standing at Rs.25.34 billion. The OMO Department of the Central Bank drained out an amount of Rs. 10 billion on an overnight basis by way of a repo auction at a weighted average of 7.90%. 

Rupee remains mostly unchanged

 The USD/LKR rate on spot contracts remained mostly unchanged yesterday to close the day at Rs. 176.45/55. The total USD/LKR traded volume for 3 June was $ 66.45 million

Given are some forward USD/LKR rates that prevailed in the market: one month – 177.20/35; three months – 178.75/95; six months – 180.90/30.