Bond yields increase further ahead of weekly Treasury bill auction  

By Wealth Trust Securities

The secondary market bond yields increased further yesterday with the liquid maturities of 15.05.26 and 2027’s (i.e., 01.05.27 & 15.09.27) hitting intraday highs of 29.90% and 29.50% respectively against its previous day’s closing levels of 29.70/90 and 29.20/50. In addition, maturities of 01.05.24 and 15.01.25 changed hands at levels of 31.25% and 33.00% respectively as well.

This is ahead of today’s weekly Treasury bill auction, where a total amount of Rs.85 billion is on offer, a reduction of Rs. 15 billion over its previous week. This will consist of Rs. 45 billion on the 91-day maturity and Rs. 20 billion each on the 182-day and 364-day maturities.  At last week’s auction, weighted average rates on the 182-day and 364-day maturities remained steady at 28.72% and 27.72% respectively while the weighted average rate on the 91-day maturity decreased by 03 basis points to 29.88%. An amount of Rs. 125 billion was accepted in total against its total offered amount of Rs.100 billion.

In the secondary bill market, March, May, June and November 2023 maturities traded at levels of 28.00% to 28.50%, 30.00% each and 29.50% respectively. 

The total secondary market Treasury bond/bill transacted volume for 13 February was Rs. 2.72 billion.   

In money markets, the overnight net liquidity was recorded at a deficit of Rs. 213.94 billion yesterday as an amount of Rs. 213.94 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 15.50%. The weighted average rates on overnight call money and REPO stood at 15.50% each.

Forex Market 

In the Forex market, the middle rate for USD/LKR spot contracts remained steady at Rs. 361.92.

The total USD/LKR traded volume for 13 February was $ 33.30 million.  

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