Impressive outcome at weekly Treasury Bill auction

• Auction fully subscribed

By Wealth Trust Securities

This week the Treasury Bill weighted average rates were seen decreasing sharply across the board for a fourth consecutive week at its auctions held yesterday. The decline was 223, 224 and 75 basis points on the 91-day, 182-day and 364-day maturities respectively.

This was on the back of the Central Bank of Sri Lanka in a proactive move decreasing its Statutory Reserve Ratio (SRR) applicable on all rupee deposit liabilities of Licensed Commercial Banks (LCBs) by 200 basis points at its announcement last week.

The total offered volume of Rs. 180 billion was accepted at the 1st phase of the auction while the phase 2 of the auction will be opened for all 3 maturities at their weighted averages until close of business of the day prior to settlement (i.e., 4.00 p.m. on 17.08.2023). Given below are the details of the auction,

Meanwhile, the secondary bond market saw limited trades down on the liquid maturities of 01.07.25, 15.09.27, 01.05.28 traded at 13.27%, 13.00% and 12.90% respectively.

The total secondary market Treasury bond/bill transacted volume for 15 August was Rs. 7.95 billion. In money markets, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of overnight reverse repo auction for a volume of Rs. 39.50 billion at weighted average of 11.64% while an amount of Rs. 55.36 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 12.00%. The net liquidity deficit stood at Rs. 87.81 billion yesterday.

The weighted average rates on overnight call money and repo were registered at 11.57% and 11.89% respectively.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts traded within the range of Rs. 320.75 to Rs. 321.75 yesterday before closing the day at Rs. 321.50/322.00. The total USD/LKR traded volume for 15 August was $ 22.25 million. 

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