Bond yields edge up further ahead of weekly auction

 The secondary market bond yields edged up further yesterday, mainly on the very short end of the yield curve, driven by persistent selling interest ahead of today’s weekly Treasury bill auction. Yields on the short dated Treasury bonds of 2021’s (01.08.21 & 15.10.21), 2022’s (01.07.22, 01.10.22 & 15.12.22) along with 15.01.23 were seen hitting highs of 4.85%, 5.05%, 5.70%, 5.85%, 5.90% and 6.00% respectively in addition to 15.09.24 changing hands at 6.49%. Secondary market Treasury bills consisting of the maturities of January, February, September and October 2021 were seen changing hands at highs of 4.75%, 4.80%, 4.92% to 4.95% and 5.00% respectively.

Today’s bill auction will see Rs. 39.3 billion on offer, consisting of Rs. 2.5 billion on the 91-day, Rs. 13.3 billion on the 182-day and a further Rs. 23.5 billion on the 364-day maturities. The stipulated cut off rates were published at 4.65%, 4.76% and 5% on the 91, 182 and 364-day maturities respectively, marginally above its previous weeks weighted averages of 4.61%, 4.73% and 4.98%. The previous week auction went undersubscribed for a fourth consecutive week.

The total secondary market Treasury bond/bill transacted volumes for 23 November was Rs. 6.81 billion.   

The overnight surplus liquidity in the money market stood at Rs. 187.65 billion yesterday while call money and repo averaged 4.54% and 4.58% respectively.

Rupee dips

In the USD/LKR market, spot next contracts in the absence of spot contracts were seen closing the day lower at Rs. 185.80/95 against its previous day’s closing of Rs. 185.10/40 on the back of buying interest by banks.

The total USD/LKR traded volume for 23 November was $ 62.40 million.   

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