Money market liquidity shortfall increases to a one-year high

By Wealth Trust Securities

The net liquidity shortfall in the money market system was seen increasing to a one-year high of Rs. 36.87 billion yesterday as a total of Rs. 57.81 billion was infused into the system by way of a reverse repo auction and access to the Central Bank’s Standing Lending Facility (SLF). The overnight reverse repo auction injected an amount of Rs. 39.36 billion on an overnight basis at a weighted average of 8.46% with a further Rs. 18.45 billion being drawn down from CBSL’s Standing Lending Facility at a rate of 8.50%. An amount of Rs. 20.95 billion was deposited at CBSL’s Standing Deposit Facility (SDF) at the rate of 7.25%, bringing the total shortfall to Rs. 36.87 billion. The call money rate averaged 8.48%.

The secondary bond market activity dipped considerably yesterday as most market participants were seen on the sidelines. Trades were witnessed only on the two short tenure maturities of 01.07.19 and 15.12.21 at levels of 9.50% and 10.10%, respectively, amidst thin volumes.

The total volume of bonds transacted in the secondary market on 29 June was Rs. 4.09 billion.

Rupee loses

In the Forex market, the USD/LKR spot rate was seen depreciating yesterday to close the day at Rs. 158.40/50 against the previous day’s closing levels of Rs. 158.20/40 on the back of moderate importer demand.

The total USD/LKR traded volume for 29 June was $ 63.60 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 159.20/35; 3 Months - 160.75/00 and 6 Months - 163.20/50.