Demand at T-bond auctions decreases further

• Rs. 170 b T-bill auction in focus
• Rupee appreciates further

By WealthTrust Securities

The total accepted amount at yesterday’s round of Treasury bond auctions decreased to a low of 73.13% of its total offered amount, against 95.12% recorded at its previous round of auctions conducted on the 11 July. 

Only an amount of Rs. 146.26 billion was successfully taken up against its total offered amount of Rs. 200 billion.

The weighted average rates were registered at 12.07%, 12.55%, and 12.83% respectively on the 15.02.28, 15.10.30, and 01.06.33 maturities, while phase II for all the maturities were opened for subscription at its weighted average rates.

Meanwhile, activity in the secondary bond market increased following the auction outcome as 15.12.26, 15.02.28, and 15.09.29 maturities were seen changing hands at levels of 10.55%, 12.07% to 12.10%, and 12.25% respectively.

Additionally, in secondary market T-bills, the February 2025 maturities (close to six months) were seen changing hands at the rate of 9.40%.

The weekly Treasury bill auction due today, will see a total amount of Rs. 170 billion on offer, an increase of Rs. 10 billion over its previous week. This will consist of Rs. 55 billion each on the 91-day and 182-day maturities and Rs. 60 billion on the 364-day maturity.

Meanwhile, at the weekly Treasury bill auction held last Wednesday, the entire Rs. 160 billion offered was fully subscribed. This marked the third consecutive week of declining weighted average rates. The 91-day yield dropped by 41 basis points to 9.14%, the 182-day yield fell by 44 basis points to 9.34%, and the 364-day yield decreased by 12 basis points to 9.95%. An additional Rs 16 billion was raised at the second phase, being the maximum amount offered at the second phase. 

The total secondary market Treasury bond/bill transacted volume for 29 July was Rs. 2.39 billion.

In money markets, the DOD (Domestic Operations Department) of the Central Bank injected liquidity by way of a seven-day reverse repo auction for a volume of Rs. 20 billion at the weighted average rate of 8.49%, while an amount of Rs. 117.61 billion was deposited at the Central Bank’s SLFR (Standard Lending Facility Rate) of 8.25%. The net liquidity surplus stood at Rs. 40.58 billion yesterday.

The weighted average rates on overnight call money and repo were registered at 8.57% and 8.80% respectively.

Forex market 

In the Forex market, the USD/LKR on spot contracts appreciated further to close the day at Rs. 302.48/302.55 against its previous day’s closing level of Rs. 302.63/302.73.

The total USD/LKR traded volume for 29 July was $ 50.35 million.

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