Bond market at standstill ahead of weekly bill auction

By Wealth Trust Securities  

The secondary bond market was at a complete standstill yesterday ahead of the first weekly Treasury bill auction due today following the 100 basis point increase in policy rates.

The auction will see a total volume of Rs. 60 billion on offer, an increase of Rs. 5 billion over its previous weeks total offered volume. The three maturities of 91 day, 182 day and 364 days will see Rs. 20 billion each on offer. At last week’s auction, weighted average rates on all three maturities increased by 72, 135 and 142 basis points respectively to 9.33%, 9.88% and 9.95%.

The total secondary market Treasury bond/bill transacted volume for 7 March was Rs. 2.05 billion.   

In money markets, the overnight net liquidity deficit was registered at Rs. 602.36 billion yesterday as an amount of Rs. 81.75 billion was deposited at Central Banks Standard Deposit Facility Rate (SDFR) of 6.50% against an amount of Rs. 684.11 billion withdrawn from Central Banks Standard Lending Facility Rate (SLFR) of 7.50%. The weighted average rates on overnight call money and REPO stood at 7.49% and 7.50% respectively.

Forex market 

In the forex market, limited trades on the USD/LKR cash and spot contracts were seen at levels of Rs. 229.50 to Rs. 230.00 yesterday while the overall market remained inactive.   

The total USD/LKR traded volume for 7 March was $ 26.20 million.   

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