Mixed results at weekly bill auction

• Bids-to-offer ratio pick up to five-week high
• Bond market activity picks up

By Wealth Trust Securities

The weekly Treasury bill auction conducted on 24 December registered mixed outcomes as weighted averages of the 91 and 364 day bills were steady at 7.51% and 8.45% respectively while the weighted average on the 182 day bill increased by 5 basis points to 8.02%. The 182 day bill was the most sought-after maturity at the auction, as it raked in Rs. 10.98 billion in successful bids against its offered amount of Rs. 5 billion which resulted in the total offered amount of Rs. 13.5 billion been subscribed. The bids to offer ratio improved to a five week high of 3.20:1. 

The secondary bond market reactivated on 24 December as renewed buying interest mainly on the liquid maturities of 2024’s (i.e. 01.01.24, 15.03.24 & 15.09.24) and 2027’s (i.e. 15.01.27 & 15.10.27) saw its yields dip to intraday lows of 9.80% each, 10.00% and 10.05% respectively. In addition, maturities of 15.05.23, 15.07.23, 01.09.28 and 01.05.29 changed hands at levels of 9.43% to 9.45%, 9.45%, 10.17% and 10.20% respectively.

The total secondary market Treasury bond transacted volume for 23 December was Rs. 2.7 billion.

In money markets, the overnight net liquidity surplus in the system stood at Rs. 26.07 billion on 24 December with overnight call money and repo rates averaging at 7.50% and 7.57% respectively. The Open Market Operations (OMO) Department of the Central Bank of Sri Lanka injected an amount of Rs. 25.0 billion on an overnight basis by way of Reverse Repo auctions at a weighted average rate of 7.50%. It further injected an amount of Rs. 2.00 billion for Standalone Primary Dealers by way of an overnight reverse repo auction at a weighted average rate of 7.59%.

It also injected an amount Rs. 6.18 billion for 14 days at a weighted average rate of 7.48%, value today.

Rupee loses marginally 

In the Forex market, the USD/LKR rate on spot contracts were seen depreciating further to close the day at Rs. 181.35/45 against its previous day’s closing levels of Rs. 181.30/40 on the back of continued buying interest by banks.

The total USD/LKR traded volume for 23 December was $ 83.60 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 181.85/00; 3 months - 182.70/90 and 6 months - 184.50/80.