Rs. 100 b Treasury bill auction in spotlight

•  Bond market sees subdued activity; yields edge up marginally 
• Rupee stable

By Wealth Trust Securities

The weekly Treasury bill auction due today will have in total an amount of Rs. 100 billion on offer, which will consist of Rs. 30 billion on the 91-day maturity, Rs. 40 billion on the 182-day maturity and a further Rs. 30 billion on the 364-day maturity. This reflects an increase of Rs. 22.5 billion in the offered amount on a week-on-week basis.

For context, last week’s Treasury bill auction saw the weighted average rate on the 91-day maturity decline by six basis points to 14.45%, while the weighted averages on the 182-day and 364-day maturities remained unchanged at 14.16% and 12.93% respectively. An amount of Rs. 155.18 billion or 96.99% of the total offered amount of Rs. 160 billion was raised at the first phase of the auction while an additional amount of Rs. 6.20 billion was raised at the second phase, only on the 364-day maturity.

The secondary bond market yesterday, saw two-way quotes edge up, with relatively slim volumes being transacted. Accordingly, the market continued on a dull note, with the selected maturities of the 15.01.25, two 26’s (01.06.26 and 01.08.26), three 28’s (15.03.28, 01.05.28 and 01.07.28) and 15.05.30 seeing limited trades within the levels of 13.35% to 13.30%, 13.90% to 13.85%, 14.28% to 14.20% and 14.25% respectively.

Meanwhile, secondary market Treasury bill maturities of March/April and June 2024 transacted at 14.25% to 14.20% and 14.15% to 14% respectively.

The total secondary market Treasury bond/bill transacted volume for 8 January was Rs. 17.57 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 9.09% and 9.84% respectively while the net liquidity deficit stood at Rs. 37.72 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight Repo auction for Rs. 25 billion at a weighted average rate of 9.15%. An amount of Rs. 20.42 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 10% while an amount of Rs. 7.70 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 9%. 

Forex Market

In the Forex market, the USD/LKR rate on spot contracts closed the day broadly steady at Rs. 322.50/322.70 against its previous day’s closing level of Rs. 322.40/322.50.

The total USD/LKR traded volume for 8 January was $ 41.90 million.

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