Bond yields dip further ahead of the weekly T-Bill auction

•  Rs 180 billion on offer once again at T-Bill auction
• Rupee continues to dip marginally

The positive sentiment in the secondary bond market continued yesterday as yields were seen dipping for a seventh consecutive trading day. Activity was mainly seen on the 15.05.26 and 2027’s (i.e., 01.05.27 & 15.09.27) maturities as its yields decreased to intraday lows of 23.95%, 22.80% and 22.70% respectively. In addition, maturities of 01.07.25 and 15.01.28 changed hands at levels 26.00% and 21.90% to 22.00% respectively as well.

Today’s weekly Treasury bill auction will have in total an amount of Rs. 180 billion on offer, an increase of Rs. 40 billion over last week. This will consist of Rs. 70 billion on the 91-day maturity, Rs. 60 billion on the 182-day maturity and a further Rs.50 billion on the 364-day maturity.

At last week’s auction, weighted average rates decreased across the board by 244, 339 and 381 basis points to 23.21%, 21.90% and 19.10% on the three maturities respectively. The full offered amount of Rs. 140.00 billion was accepted at the 1st phase of the auction while a further amount of Rs. 35.00 billion was raised at its phase II.

The total secondary market Treasury bond/bill transacted volume for 12 June 2023 was Rs. 10.12 billion. In money markets, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for a volume of Rs. 23.10 billion at weighted average rate of 13.48% while an amount of Rs. 111.40 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 14.00%. The weighted average rates on overnight call money and REPO stood at 13.81% and 14.00% respectively.

Furthermore, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of a 30-day reverse repo auction for a volume of Rs. 2.5 billion at weighted average rate of 16.8%, valued today.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts were traded within the range of Rs. 301.00 to Rs. 307.25 yesterday before closing the day at Rs. 305.00/309.00 against its previous day’s closing level of Rs. 300.00/303.00. The total USD/LKR traded volume for 12 June was $ 73.68 million.  

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