Bond yields continue to tumble ahead of weekly bill auction

By Wealth Trust Securities

The secondary bond market yields continued to fall yesterday on the back of persistent buying interest ahead of today’s weekly Treasury bill auction. 

The liquid maturities of 01.07.25 and 15.01.28 saw its yields hit intraday lows of 31.15% and 31.00% respectively against its previous day’s closing levels of 31.80/00 and 31.75/00. In addition, 15.07.29 maturity traded at a low of 30.47% as well. In secondary bills, last week’s 3 month or 91-day bill was traded within the range of 32.25% to 32.50%. 

Today’s Treasury bill auction will see a total volume of Rs. 80 billion on offer which will consist of Rs.35 billion on the 91-day maturity, Rs. 25 billion on the 182-day maturity and a further Rs. 20 billion on the 364-day maturity. 

At last week’s auction, the weighted average rate on the 91-day maturity decreased for the first time in 07 weeks by 08 basis points to 33.06% while on the 182-day and 364-day maturities it decreased by 02 basis points each to 32.51% and 29.53% respectively. The total offered amount of Rs. 80.00 billion was accepted at the 1st phase of the auction while a further amount of Rs. 1.24 billion was raised at its phase II.

The total secondary market Treasury bond/bill transacted volume for 21 November 2022 was Rs. 5.20 billion.   

In money markets, the net liquidity deficit stood at Rs. 162.53 billion yesterday as an amount of Rs. 330.70 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 14.50% against an amount of Rs. 493.23 billion withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 15.50%.

Forex Market 

In the Forex market, the middle rate for USD/LKR spot contracts remained steady at Rs. 363.50 yesterday.

The total USD/LKR traded volume for 21 November was $ 4.28 million.  

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