Activity remains moderate ahead of weekly T-bill auctions

• Liquidity drained out close to SLFR

By Wealth Trust Securities

The activity in the secondary bond market remained moderated yesterday with only the 01.12.24 maturity changing hands at levels of 9% to 9.02%.

This is ahead of today’s bill auction, where in total an amount of Rs. 65.7 billion will be on offer, consisting of Rs. 14.5 billion on the 91-day, Rs. 20 billion on the 182-day and Rs. 31.2 billion on the 364-day maturities. At last week’s auction, weighted average rates on all three maturities increased to 6.70%, 6.99% and 7.01% respectively.

The total secondary market Treasury bond/bill transacted volume for 4 October was Rs. 3.53 billion.   

In money markets, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka drained out an amount of Rs. 6 billion by way of an overnight repo auction at a weighted average rate of 5.95%, while an amount of Rs. 103.67 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 5%. However, the attempt to drain out liquidity for 12 days was not successful as bids were not accepted. The weighted average rates on overnight call money and repo decreased marginally to 5.91% and 5.92% respectively as an amount of Rs. 154.52 billion was withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 6%. The net overnight liquidity shortage increased to Rs. 44.84 billion yesterday.

USD/LKR   

The Forex market remained inactive yesterday. The total USD/LKR traded volume for 4 October was $ 51 million.   

 (References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money 

broking companies)