Auction undersubscribed as weekly weighted averages increase

By Wealth Trust Securities

The removal of the yield guidance for the weekly Treasury bill auctions saw its weighted averages continuing its upward trend, recording sharp increases across all three maturities yesterday. 

The market favourite 91-day bill maturity recorded an increase of 30 basis points to 6.38%, while the 364-day bill registered an increase of 38 basis points to 6.50%. The 182-day maturity, which was accepted after a lapse of two weeks, recorded a weighted average rate of 6.27%.

However, the auction was undersubscribed for a 10th consecutive week as only 51.07% or Rs. 20.17 billion was accepted in total against a total offered amount of Rs. 39.50 billion. The bids-to-offer ratio increased to 1.40:1. 

Activity in the secondary bond market was at a standstill yesterday with a majority of market participants opting to be on the side lines. A trade was witnessed on the 01.12.24 maturity at 8.45%.

The total secondary market Treasury bond/bill transacted volume for 21 September was Rs. 1.75 billion.   

In money markets, the net liquidity deficit was registered at Rs. 203.09 billion yesterday with an amount of Rs. 73.99 billion been deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) against an amount of Rs. 277.08 billion withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate). The weighted average rates on overnight call money and repo remained steady at 5.96% and 5.93% respectively.

USD/LKR   

The Forex market continued to remain inactive yesterday. The total USD/LKR traded volume for 21 September was $ 20.50 million.   

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