Bond yields increase for first time in eight days

By Wealth Trust Securities

Renewed selling interest saw secondary market bond yields increasing yesterday for the first time in eight days ahead of the weekly Treasury bill auction.

The yields on the liquid maturities of 15.06.24, 15.09.24 and 15.09.34 rose to intraday highs of 10.02%, 10.04% and 10.73% respectively against its previous day’s closings of 9.93/98, 9.95/00 and 10.68/72 while the maturities of 15.12.21, two 2023’s (i.e. 15.03.23 & 15.07.23), 01.06.26 and 15.01.27 changed hands at levels of 8.70%, 9.525% to 9.625%, 10.17% and 10.27% respectively as well. However buying interest at these levels of curtailed any further upward movement. In secondary bills, January and October 2020 maturities traded at levels of 7.55% to 7.60% and 8.30% respectively. 

Today’s weekly Treasury bill auction will have on offer an amount of Rs. 22 billion consisting of Rs. 1 billion on the 91 day maturity, Rs. 6 billion on the 182 day maturity and Rs. 15 billion on the 364 day maturity. At last week’s auction, weighted averages decreased across the board by 02, 04 and 06 basis points on the 91 day, 182 day and 364 day maturities respectively to 7.56%, 7.69% and 8.35%.

The total secondary market Treasury bond/bill transacted volume for 21 October was Rs. 12.30 billion. 

In money markets, the overnight call money and repo rates averaged 7.51% and 7.52% respectively as the overnight net liquidity surplus in the system stood at Rs. 17.02 billion yesterday. The Open Market Operations (OMO) Department of Central Bank injected an amount of Rs. 13.85 billion by way of an overnight Reverse repo auction at a weighted average rate of 7.50%. 

Rupee appreciates further 

 In the Forex market, the rupee on its spot contracts were seen appreciating further yesterday to close the day at Rs. 181.55/70 against its previous day’s closing level of Rs. 181.70/80 on the back of continued selling interest by banks.

The total USD/LKR traded volume for 21 October was $ 63.03 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 182.25/50; three months - 183.35/50 and six months - 185.20/40.