Bond yields down ahead of weekly T-Bill auction

By Wealth Trust Securities

Renewed buying interest in the secondary bond market on the liquid maturities of two 2025’s (i.e. 01.06.25 and 01.07.25), 15.05.26, 15.09.27, 01.05.28, 15.05.30 and 01.07.32 saw its yields decreasing ahead of the weekly Treasury bills auction due today. 

The said maturities changed hands at the levels of 14.90%, 15.00% to 15.05%, 14.40% to 14.44%, 14.23% to 14.30%, 13.30% to 13.50%, 13.00% to 13.25% and 13.00% respectively against its previous day’s closing levels of 14.90/15.10 (on the 01.07.25), 14.55/65, 14.35/38, 13.40/70,13.20/35,13.00/20.

Today’s weekly Treasury bill auction will have in total an amount of Rs. 180 billion on offer which will consist of Rs. 90 billion on the 91-day maturity, Rs. 50 billion on the 182-day maturity and a further Rs. 40 billion on the 364-day maturity.

At last week’s auction, the weighted averages decreased across the board to 19.90%, 17.57% and 14.16% on the 91-day, 182-day and 364-day maturities respectively. An amount of Rs. 180.00 billion was accepted at the 1st phase of the auction while a further amount of Rs. 45.00 billion was raised at its phase II.

The total secondary market Treasury bond/bill transacted volume for 7 August was Rs. 8.15 billion. In money markets, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of overnight auction for a volume of Rs. 118.00 billion at the weighted average rate of 11.48% as the net liquidity deficit stood at Rs. 170.74 billion yesterday.

Further an amount of Rs. 52.79 billion was withdrawn from Central Bank’s SLFR (Standard Lending Facility Rate) of 12.00% while the weighted average rates on overnight call money and repo were registered at 11.54% and 12.00% respectively.

Forex market 

In the forex market, the USD/LKR rate on spot next contracts closed at Rs. 320.00/320.50 yesterday against its previous day’s closing level of Rs. 321.00/323.00.

The total USD/LKR traded volume for 7 August was $ 27.50 million. 

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