Bond market activity moderates ahead of weekly T-bill auction, inflation decreases

Wednesday, 1 March 2023 00:10 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The activity levels in the secondary bond market moderated yesterday, as limited trades were witnessed on the 15.05.26, 01.05.27 and 15.01.28 maturities at levels of 29.60%, 28.90% to 28.95% and 28.25% to 28.35% respectively.

This was ahead of today’s weekly Treasury bill auction, where a total amount of Rs. 85 billion is on offer, an increase of Rs. 10 billion over its previous week. This will consist of Rs. 45 billion on the 91-day maturity and Rs. 20 billion each on the 182-day and 364-day maturities.

At last week’s auction, weighted average rates on the 91-day and 364-day maturities decreased by 11 and 04 basis points respectively to 29.72% and 27.67% while the weighted average rate on the 182-day maturity remained steady at 28.67%. An amount of

Rs. 56.43 billion was accepted in total against its total offered amount of Rs. 75 billion.

In secondary bills, trades were reported on the April, May 2023 and February 2024 maturities at levels of 26.25% to 26.50%, 29.25% to 29.40% and 27.05% to 27.55% respectively.

Meanwhile, the Colombo Consumer Price Index -CCPI (Base;2021=100) or inflation for the month of February came in at 50.6% on its point to point as against 51.7% recorded in January. The total secondary market Treasury bond/bill transacted volume for 27th February 2023 was

Rs. 8.27 billion.

In money markets, the weighted average rates on overnight call money and REPO stood at 15.27% and 15.48% respectively while an amount of

Rs. 124.26 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 15.50%.

The net liquidity deficit stood at Rs. 43.38 billion yesterday as an amount of Rs. 80.87 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 14.50%.

Forex Market

In the Forex market, the middle rate for USD/LKR spot contracts appreciated further to Rs. 361.6318 against its previous days of Rs. 362.4983 while tom and spot contracts were traded within the range of Rs. 356.63 to Rs. 360.50.

The total USD/LKR traded volume for 27th February was $ 64.85 million.

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