Bullish outcome at weekly Treasury bill auction

By Wealth Trust Securities 

The weekly Treasury bill auction held yesterday saw its weighted average rates on all three maturities decrease for the first time in six weeks in addition to the full offered amount been accepted for the first time in four weeks. 

The drop in averages was led by the 182 day and 364 day bills as it recorded declines of 46 and 24 basis points respectively, although only small volumes were accepted. A total of 98.6% or 78.88 billion was accepted on the market favourite 91 day bill against a total offered amount of Rs. 80 billion while its average declined by 18 basis points to 32.17%.

The second phase of the auction will be opened on the 182 day and 364 day maturities at its weighted average rates until close of business of the day prior to settlement (i.e. 3:30 p.m. on 15.09.22). 

Meanwhile, the secondary bond market yields remained broadly unchanged yesterday as activity remained muted. Secondary market activity was witnessed on Treasury bill maturities of September, October and November 2022 at levels of 20.00% to 22.00%, 27.80% to 28.00% and 29.75% respectively, pre-auction. In addition, the latest 91 day bill changed hands at a low of 30.00% post auction.

The total secondary market Treasury bond/bill transacted volume for 13 September was Rs. 38.34 billion.   

In money markets, the weighted average rate on overnight REPO stood at 15.50% while an amount of Rs. 803.02 billion was withdrawn from Central Bank’s Standard Deposit Facility Rate (SDFR) of 15.50%. The net liquidity deficit stood at Rs. 424.34 billion yesterday as an amount of Rs. 378.67 billion was deposited at Central Bank’s Standard Lending Facility Rate (SLFR) of 14.50%.

Forex market 

In the forex market, the middle rate for USD/LKR spot contracts depreciated further to Rs. 362.45 yesterday against its previous day’s closing level of Rs. 362.2824.

The total USD/LKR traded volume for 13 September was $ 99.05 million.  

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