Bond yields increase marginally ahead of weekly Treasury bill auction

• Rupee appreciates slightly

By Wealth Trust Securities

The short and fresh trading week commenced with secondary market bond yields increasing yesterday on the back of selling interest while volumes changing hands were moderate. This resulted in yields on the liquid maturities of 01.07.25 and 15.09.27 increasing to intraday highs of 27.60% and 26.00% respectively against its previous day’s closing levels of 26.75/00 and 25.40/60. Nevertheless, renewed buying interest at these levels saw yields decrease once again to close the day lower.

Today’s weekly Treasury bill auction will have on offer a total amount of Rs. 120 billion, consisting of Rs. 60 billion of the 91-day maturity, Rs. 20 billion of the 182-day maturity and Rs. 40 billion of the 364-day maturity. At last week’s auction, the weighted average yield on the 364-day maturity decreased by 194 basis points to 22.37% while the weighted average yields on the 91-day bill and 182-day bill decreased by 187 and 169 basis points respectively to 24.12% and 24.10%. The total offered amount of Rs. 110.00 billion was accepted at the first phase of the auction while a further amount of Rs. 18.37 billion was raised at its phase II.

The total secondary market Treasury bond/bill transacted volume for 6 April 2023 was Rs. 37.61 billion.

In money markets, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of 7-day and 30-day reverse repo auctions for a total volume of Rs. 71.95 billion at weighted average rates of 16.50% and 22.07% respectively.

The weighted average rate on overnight call money and repo stood at 16.50% each while an amount of Rs. 200.59 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 16.50%.

Forex Market

In the Forex market, the USD/LKR spot contracts closed the day at Rs. 319.00/320.00 yesterday against its previous day’s closing level of Rs. 320.00/321.00. 

The total USD/LKR traded volume for 6 April was $ 107.05 million.

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