Bond market sees subdued activity; yields stable

• Rs. 95 b on offer at weekly T. Bill auction; Rupee appreciates

By Wealth Trust Securities

The secondary bond market commenced the trading week yesterday with two-way quotes holding steady, with relatively slim volumes being transacted. 

Accordingly, the selected maturities of 01.02.26, 15.09.27 and three 28’s (15.01.28, 15.03.28 and 01.07.28) saw limited trades at levels of 13.75%, 14.05% to 14.01% and 14.21% to 14.18% respectively.

The weekly Treasury bill auction due today will have in total an amount of Rs. 95 billion on offer, which will consist of Rs. 30 billion on the 91-day maturity, Rs. 45 billion on the 182-day maturity and a further Rs. 20 billion on the 364-day maturity. This reflects a decrease of Rs. 5 billion in the offered amount on a week-on-week basis. For context, last week’s Treasury bill auction saw the weighted average rate on the 91-day maturity decline by 18-basis points to 14.27%, and the 182-day maturity by 07-basis point to 14.09%. The 364-day maturity remained unchanged at 12.93%, having remained static for 3 consecutive weeks. The entire total offered amount of Rs. 100.00 billion was raised at the 1st phase of the auction, while an additional amount of Rs. 3.09 billion was raised from the 2nd phase only on the 364-day maturity. The secondary market Treasury bill maturities of February, March and June 2024 transacted at 12.00%, 12.25% and 13.70% to 13.60% respectively.  The total secondary market Treasury bond/bill transacted volume for 12 January was Rs. 16.79 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 9.15% and 9.12% respectively while the net liquidity deficit stood at Rs. 122.81 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight Repo auction for Rs. 75.15 billion at a weighted average rate of 9.15%. An amount of Rs. 47.66 billion was withdrawn from Central Bank’s SLFR (Standard Lending Facility Rate) of 10.00%. 

Forex market

In the forex market, the USD/LKR rate on spot contracts closed the day considerably up at Rs. 321.40/321.60 against its previous day’s closing level of Rs. 322.10/322.20.

The total USD/LKR traded volume for 12 January was $ 83.15 million.

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