Bond yields increase ahead of weekly T-Bill auctions

• Liquidity deficit increases

The secondary bond market yields were seen increasing yesterday ahead of today’s weekly T-Bill auctions. Selling interest on the 2023 maturities (i.e.15.03.23, 15.07.23 and 01.09.23) and 01.12.24 saw

it change hands at levels of 5.95%, 6.12%, 6.18% and 7.20% respectively while the 01.10.22 traded at 5.70%.

At today’s bill auction, a total volume of Rs. 53.5 billion will be on offer, Rs. 23 billion more than its previous weeks total offered volume. This will consist of Rs. 17.5 billion each on the 91 day and the 182 day maturities and further Rs. 18.5 billion on the 364 day maturity. 

The stipulated cut off rate on the 364 day maturity was increased by 05 basis points to 5.38% while the maximum yield rates of the 91 day and 182 day maturities will be decided below the level of the 364 day maturity. 

At last week’s auction, the total accepted volume increased to a high of 93.17% of its total offered volume while the weighted average rates increased across the board by 03 basis points each and 04 basis points respectively to 5.27% each and 5.32%.

The total secondary market Treasury bond/bill transacted volume for 16 August was Rs. 0.15 billion.   

In money markets, the weighted average rates on call money and repo was registered at 5.08% and 5.10% respectively as an amount of Rs. 87.98 billion was deposited at Central Banks SDFR of 4.50% yesterday. The net liquidity shortfall increased to Rs. 22.04 billion as an amount of Rs. 110.02 billion been withdrawn from Central Banks SLFR of 5.50%.

USD/LKR   

In Forex markets, the overall market continued to remain inactive yesterday.

The total USD/LKR traded volume for 16 August was $ 11.50 million.   

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