Bond market activity moderates ahead of weekly T-bill auction

Wednesday, 12 July 2023 00:20 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The activity levels in the secondary bond market moderated yesterday with limited trades witnessed only on the 2027’s (i.e., 01.05.27 and 15.09.27) and 01.07.32 maturities at levels of 14.50% to 14.95% and 13.10% to 14.00% respectively.

This was ahead of today’s weekly Treasury bill auction, where a total amount of Rs. 160 billion is on offer, an increase of Rs. 20 billion over its previous week. This will consist of Rs. 70 billion on the 91-day maturity and Rs. 45 billion each on the 182-day and 364-day maturities. At last week’s auction, the weighted average rate on the 91-day maturity decreased by 521 basis points to 17.79% while the weighted average rates on the 182-day and 364-day maturities decreased by 356 and 313 basis points to 15.93% and 13.86% respectively. An amount of Rs. 175 billion was accepted in total against its total offered amount of Rs. 140 billion.

In secondary bills, trades were reported on August, September and December 2023 along with March and June 2024 maturities at levels of 17.00%, 17.50%, 18.00%, 17.00% and 14.50% respectively.

The total secondary market Treasury bond/bill transacted volume for 10 July 2023 was Rs. 20.40 billion.

In money markets, the weighted average rates on overnight call money and REPO stood at 11.71% and 12.00% respectively while the net liquidity deficit stood at Rs. 179.62 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of overnight and 7-day reverse repo auctions for a total volume of Rs. 104.50 billion at weighted average rates of 11.59% and 12.00% respectively. An amount of Rs. 78.88 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 12.00% against an amount of Rs. 3.76 billion deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 11.00%.

Forex Market

In the Forex market, the USD/LKR spot contracts were seen trading within the range of Rs. 313.50 to Rs. 314.25 against its previous day’s closing level of Rs. 312.00/313.50, before closing the day at Rs. 314.00/314.75 yesterday. The total USD/LKR traded volume for 10 July was $ 12.97 million.

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