Bond yields decrease marginally ahead of weekly bills auction

By Wealth Trust Securities

The secondary bond market yields were seen decreasing marginally yesterday ahead of today’s weekly Treasury bill auction. Buying interest on the 2023’s (i.e. 01.09.23 & 15.12.23) and 2024’s (i.e.15.06.24 & 15.09.24) saw its yields decease to daily lows of 9.30%, 9.35%, 9.52% and 9.53% respectively against its previous day’s closing of 9.33/36, 9.33/43, 9.53/56 and 9.55/57. 

At today’s bill auction, a total amount of Rs. 25.5 billion will be on offer consisting of Rs. 1.5 billion on the 91day, Rs. 7.5 billion on the 182 day and Rs. 16.5 billion on the 364 day maturities. At last week’s auction, weighted averages were seen increasing further to 8.13% and 8.58% on the 182 day and 364 day maturities respectively while all bids received on the 91 day maturity were rejected.

In the secondary bill market, March 2020, October 2020 and January 2021 maturities were seen changing hands at levels of 7.55%, 8.43% and 8.55% respectively. 

The total secondary market Treasury bond/bill transacted volume for 20 January was Rs. 10.03 billion.

In money markets, overnight call money and repo rates averaged at 7.49% and 7.51% respectively as the overnight net liquidity surplus in the system increased further to Rs. 28.56 billion yesterday.

However, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka injected an amount of Rs. 9.50 billion at a weighted average of 7.52% by way of an overnight reverse repo auction.

Rupee trades within narrow range 

The USD/LKR rate on spot contracts was seen trading within a range of Rs. 181.33 to Rs. 181.40 before closing the day at levels of Rs. 181.35/45 against its previous day’s closing levels of Rs. 181.30/35.

The total USD/LKR traded volume for 20 January was $ 72.69 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 181.85/00; 3 months - 182.85/05 and 6 months - 184.40/70.