Bond market activity moderates; yields increase marginally

Tuesday, 3 October 2023 00:04 - - {{hitsCtrl.values.hits}}

Rupee dips slightly

By Wealth Trust Securities

The secondary bond market started of the week with moderate activity; where some selling interest saw yields edging up slightly. Trades were seen predominantly on the maturities of the two 2026’s (01.06.26 & 01.08.26) within a narrow range of 15.60% to 15.65%. Additionally, the 01.07.28 maturity traded at 14.60%.

In secondary bills, significant interest was seen on March to May 2024 maturities which traded at levels of 15.00% to 15.40%. Additionally, trades were seen on December 2023 bills at rates of 17.00% to 17.60%.

The total secondary market Treasury bond/bill transacted volume for 27 September 2023 was Rs. 31.24 billion.

In money markets, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of overnight and 7-day reverse repo auctions for volumes of 31.14 billion and 40.00 billion at weighted average rates of 11.38% and 11.30% respectively. An amount of Rs. 84.25 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 12.00% while an amount of Rs. 41.06 billion was deposited with the Central Banks SLDR (Standard Deposit Facility Rate) of 11.00%. The net market liquidity deficit stood at Rs. 114.34 billion yesterday.

The weighted average rates on overnight call money and repo were registered at 11.49% and 11.69% respectively.

Forex Market

In the Forex market, the rupee or USD/LKR rate on spot contracts depreciated marginally on the back of buying interest on the greenback to close trading yesterday at Rs. 324.00/324.25 against its previous day’s closing level of Rs. 323.50/324.25.

The total USD/LKR traded volume for 27 September 2023 was $ 61.45 million.

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

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