Bond yields continue to tumble

• Rupee steady

By Wealth Trust Securities

The secondary bond market activity increased further yesterday as yields decreased further for a third consecutive day. The yields on the liquid maturities of 01.07.25, 15.01.28 and 01.07.32 were seen hitting intraday lows of 30.40% each and 29.25% respectively against its previous day’s closing levels of 30.75/85, 30.80/90 and 29.50/75. In addition, 01.06.25 maturity changed hands from a high of 30.70% to a low of 30.40% as well. In the secondary bill market, December 2022 maturities were traded at levels of 29.00% to 31.75%.

Today’s bill auction will have on offer Rs. 85 billion, consisting of Rs. 30 billion each on the 91-day and the 182-day maturities and a further Rs. 25 billion on the 364-day maturity. At last week’s auction, weighted average rates decreased across the board for a third consecutive week to 31.94%, 30.59% and 29.85%, recording decreases of 01, 04 and 02 basis points on the 91-day, 182-day and 364-day maturities respectively. A total amount of Rs. 81.68 billion was accepted at the auction while a further amount of Rs. 0.17 billion was raised at its phase II.

The total secondary market Treasury bond/bill transacted volume for 3 October 2022 was Rs. 8.70 billion.   

In money markets, the net liquidity deficit stood at Rs. 368.60 billion yesterday as an amount of Rs. 327.70 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 14.50% against an amount Rs. 696.29 billion withdrawn from Central Banks SLFR (Standard Deposit Facility Rate) of 15.50%. The weighted average rate on overnight REPO stood at 15.50%.

Forex Market 

In the Forex market, the middle rate for USD/LKR spot contracts remained steady at Rs. 362.90.

The total USD/LKR traded volume for 3 October was $ 10.35 million.  

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