Bond auctions rejected first time in over one and a half years

• Secondary bond market yields steady on active trading
• Rupee steady

By Wealth Trust Securities

The Treasury bond auctions conducted yesterday saw all bids rejected for the first time in over 19 months or since the round of auctions conducted on 29 March 2022. 

Nevertheless, secondary market yields held steady on the short to medium tenures, with activity increasing subsequent to the announcement of the outcome of the auctions. Accordingly, the liquid maturities of the three 25’s (i.e., 15.01.25, 01.06.25 and 01.07.25), two 26’s (i.e., 01.06.26 and 01.08.26), 15.09.27 and 15.05.30 traded within the ranges of 15.00% to 14.90%, 15.00% to 14.95%, 15.00% and 14.25% respectively.

In secondary bills, November/December 2023 maturities changed hands at 14.80% to 15.35% while January and April 2024 maturities were traded at 15.75% and 14.80% respectively. The total secondary market Treasury bond/bill transacted volume for 27 October 2023 was Rs. 21.19 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 10.28% and 10.89% respectively while the net liquidity deficit stood at Rs.7.63 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight auction for Rs 15.85 billion at the weighted average rates of 10.10%. An amount of Rs. 26.88 billion was withdrawn from Central Bank’s SLFR (Standard Lending Facility Rate) of 11.00% while an amount of Rs. 35.10 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 10.00%. 

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day at Rs.327.40/327.70 against its previous day’s closing level of Rs.327.20/327.40.

The total USD/LKR traded volume for 27 October was US $ 44.25 million. 

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