Downward trend in weekly weighted averages continues

By Wealth Trust Securities

The weighted averages at yesterday’s weekly Treasury bill auction deceased across the board for a fourth consecutive week with the 91 day bill decreasing by 10 basis points to 7.99%, recording a weighted average below 8.00% for the first time since 07 February 2018. Furthermore the 364 day bill weighted average decreased by 08 basis points to 8.46%, recording a weighted average blow the SLFR (Standing Lending Facility rate) once again, an occurrence which last took place prior to the policy rate cut in May 2019. The weighted average rate of the 182 day bill decreased the sharpest by 12 basis points to 8.09%. The total offered amount of Rs.23.5 billion was successfully accepted as the ratio of total bids received to total offered amount stood at 3.07:1.  

In the secondary bond market, activity and yields increased marginally yesterday with the maturities of 2021’s (i.e. 01.03.21, 01.05.21 & 15.10.21), two 2023’s (i.e. 15.03.23 & 15.07.23) and two 2024’s (i.e. 01.01.24 & 15.06.24) changing hands within the arrange of 8.73% to 8.80%, 9.43% to 9.55% and 9.75% to 9.78% respectively. 

The total secondary market Treasury bond/bill transacted volumes for 15 July was Rs. 0.4 billion. 

In money markets, the overnight call money and repo rates averaged 7.80% and 7.89% respectively as the overnight net liquidity surplus stood at Rs. 26.15 billion yesterday. The OMO (Open Market Operations) Department of the Central Bank of Sri Lanka drained out an amount of Rs. 10.00 billion by way of an overnight repo auction at a weighted average rate of 7.71%.   

Rupee trades within a narrow range  

 The USD/LKR rate on spot contracts traded within a narrow range of Rs. 175.65 to Rs. 175.74 yesterday before closing at levels of Rs. 175.65/70 against its previous day’s closing levels of Rs. 175.65/75.

 The total USD/LKR traded volume for 15 July was $ 92.86 million.

Some of the forward USD/LKR rates that prevailed in the market were: 1 month - 176.25/45; 3 months - 177.65/95 and 6 months - 179.65/95.