Bond yields mixed

• Rs.135 billion Treasury Bill Auction in focus
• Rupee continues to dip

By Wealth Trust Securities

The secondary market bond yields were seen creeping up albeit on moderate volumes on 15.09.27 and 01.07.28 maturities while yields dipped marginally on the 2026 tenors of 01.06.26 and 01.08.26 from levels of 14.95% to 14.90%, resulting in a further flattening of the yield curve.

In secondary market bills, January/February 2023 maturities were traded at levels between 15.50% to 15.90% and May 2024 maturities at 14.50%.

The weekly Treasury bill auction conducted today will have in total an amount of Rs.135 billion on offer, which will consist of Rs.60 billion on the 91-day maturity, Rs.40 billion on the 182-day maturity and a further Rs.35 billion on the 364-day maturity. The previous week’s auction held on 18 October saw weighted average yields reduced across the board to 16.30%, 14.94% and 13.02% on the three maturities respectively. 

The total secondary market Treasury bond/bill transacted volume for 23 October 2023 was Rs.19.17 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 10.32% and 10.59% respectively, while the net liquidity stood at a deficit of Rs. 69.90 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for Rs 39.90 billion at the weighted average rate of 10.15%. An amount of Rs. 31.60 billion was withdrawn from Central Bank’s SLFR (Standard Lending Facility Rate) of 11.00% while an amount of Rs. 1.60 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 10.00%. 

 

Forex Market

 In the Forex market, the USD/LKR rate on spot contracts closed at Rs.327.40/327.80, depreciating against its previous day’s closing level of Rs.326.20/326.40.

The total USD/LKR traded volume for 23 October was US $18.70 million. 

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