Bond yields continue to decrease ahead of weekly T-Bill auction

By Wealth Trust Securities

The continued buying interest in the secondary bond market on the liquid maturities of two 2025’s (i.e. 01.06.25 & 01.07.25), 15.05.26, 15.09.27, 01.05.28 and 15.05.30 saw its yields decreasing ahead of the weekly Treasury bills auction due today. The yields on the said maturities decreased to intraday lows of 15.90%, 15.75%, 15.37%, 15.30%, 14.80% and 14.40% respectively against its previous days closing level of 16.00/20 each, 15.60/80, 15.30/40, 15.00/10 and 14.75/80.

Today’s weekly Treasury bill auction will have in total an amount of Rs. 170 billion on offer which will consist of Rs. 70 billion on the 91-day maturity, Rs. 55 billion on the 182-day maturity and a further Rs. 45 billion on the 364-day maturity.

At last week’s auction, the weighted averages increased across the board to 19.99%, 17.77% and 14.35% on the 91-day, 182-day and 364-day maturities respectively. An amount of Rs. 63.69 billion was accepted at the 1st phase of the auction while a further amount of Rs. 11.82 billion was raised at its phase II. 

The total secondary market Treasury bond/bill transacted volume for 24 July 2023 was Rs. 9.51 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 a total volume of Rs. 100.00 billion at weighted average rates of 11.65% and 12.00% respectively as the net liquidity deficit stood at Rs. 177.24 billion yesterday. 

Further an amount of Rs. 77.34 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 12.00% while the weighted average rates on overnight call money and repo were registered at 11.50% and 11.97% respectively 

Forex Market 

In the Forex market, the USD/LKR rate on spot next contracts closed at Rs. 330.00/331.00 yesterday against its previous day’s closing level of Rs. 328.50/330.00.

The total USD/LKR traded volume for 24 July was $ 9.98 million. 

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