Bond yields decrease further ahead of weekly bill auction

By Wealth Trust Securities

The secondary market bond yields decreased further yesterday on the back of continued buying interest while activity picked up ahead of the weekly Treasury bill auction due today.

The yields on the liquid maturities of 01.06.25 and 15.07.29 hit intraday lows of 26.00% each against its previous day’s closing levels of 26.00/27.15 and 27.00/28.10. In addition, 15.06.27 and 15.01.28 traded at levels of 24.97% to 25.02% as well. In secondary bill market, October 2022 and July 2023 maturities changed hands at levels of 29.00% to 31.00% and 28.50% to 29.50% respectively.

The Treasury bill auction will see a total volume of Rs. 55 billion on offer, a reduction of Rs. 10 billion over its previous weeks total offered volume. This will consist of Rs. 32 billion on the 91 day maturity and Rs. 16.5 billion each on the 182 day and 364 day maturities. At last week’s auction, weighted average rates increased by 403, 227 and 176 basis points on the 91 day, 182 day and 364 day maturities respectively to 32.11%, 31.01% and 29.87%. An amount of Rs. 53.71 billion was accepted in total at the auction while a further amount of Rs. 0.78 billion was raised at its Phase II on the 182 day and 364 day maturities.

The total secondary market Treasury bond/bill transacted volume for 18 July was Rs. 0.82 billion.   

In money markets, no Call money and REPO transactions were witnessed while the net liquidity deficit stood at Rs. 451.16 billion yesterday. An amount of Rs. 315.36 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 14.50% while an amount of Rs. 766.51 billion was withdrawn from Central Banks SLFR (Standard Deposit Facility Rate) of 15.50%.

Forex market

In the Forex market, the middle rate for USD/LKR spot contracts depreciated once again to Rs. 361.1657 yesterday against its previous day’s closing level of Rs. 361.0331.

The total USD/LKR traded volume for 18 July was $ 6.48 million.  

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