Bond yields increase on moderate trading ahead of T-bill auction

By Wealth Trust Securities

The secondary market bond yields increased yesterday on the back of renewed selling interest mainly on the 01.05.25 maturity while activity remained moderate. The yield on the said maturity increased to an intraday high of 10.70% against its previous day’s closing level of 10.30/45 while two-way quotes on the rest of the yield curve increased and widened. In secondary market bills, January, February, March and April 2022 maturities changed hands at levels of 6.99% to 7%, 7.05% to 7.10%, 7.75% to 7.85% and 8% respectively.

The weekly bill auction due today will see a total volume of Rs. 74.50 billion on offer, an increase of Rs. 26 billion against its previous weeks total offered volume. This will consist of Rs. 25 billion on the 91-day maturity and Rs. 28 billion on the 182-day maturity and further Rs. 21.5 billion on the 364-day maturity. At last week’s auction, weighted average rates on all three maturities increased by 25, 23 and 22 basis points respectively to 8.16%, 8.33% and 8.24%.

The total secondary market Treasury bond/bill transacted volume for 3 January 2022 was Rs. 0.35 billion.  

In money markets, the net liquidity deficit was registered at Rs. 303.41 billion yesterday as an amount of Rs. 120.75 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 5% against an amount of Rs. 424.16 billion withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 6%. The weighted average rates on overnight call money and repo remained steady at 5.94% and 5.95% respectively.

USD/LKR   

In the Forex market, the USD/LKR rate on spot contracts traded at levels of Rs. 202.97 to Rs. 202.99 while the overall market remained inactive yesterday.

The total USD/LKR traded volume for 3 January was $ 57 million.   

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