Bullish outcome at Weekly Treasury Bill auction

• Secondary Bond Market Holds Steady; Moderate Activity
• Rupee dips marginally

By Wealth Trust Securities

This week’s Treasury bill auction conducted yesterday, received a bullish response as all three weighted average yields decreased across the board. The 91-day and 182-day bills saw the most demand, which led to its weighted average yield declining by 29 basis points and 12 basis points respectively to 15.64% and 14.81%, as it received bids of Rs. 117.52 billion and Rs. 108.8 billion against offered amount of only Rs. 70 billion and Rs. 65 billion. The 364-day bills also declined by 3 basis points to record weighted averages of 12.99%, the first instance it dropped below the 13% levels since April 2022. The total bids received was 1.56 times greater than the total offered amount.

An amount of Rs. 158.27 billion or 95.92% was raised of the total offered amount of Rs. 165 billion at the 1st phase of the auction. The 2nd phase of subscription, for all three maturities will be opened until 4 pm on the day before the settlement date (i.e., 09.11.2023) at the weighted averages determined at the 1st phase of the auction. 

However, the secondary bond market saw yields hold steady with relatively subdued activity. Accordingly, trades were seen on the selected maturities of 15.11.24 and 15.05.26 as it changed hands at 14.50% and 15.17% respectively.

The total secondary market Treasury bond/bill transacted volume for 07 November 2023 was Rs. 21.09 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 10.17% and 10.73% respectively while the net liquidity stood at a deficit of Rs. 14.90 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 6.20 billion at a weighted average rate of 10.04%. An amount of Rs. 9.35 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 11% while an amount of Rs. 0.65 billion was deposited at the Central Banks SDFR (Standard Deposit Facility Rate) of 10%.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day by depreciating slightly to Rs. 328.40/328.70 against its previous day’s closing level of Rs. 327.50/327.90.

The total USD/LKR traded volume for 07 November was $ 87.10 million. 

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