Rs. 120 b all-time high volume of T-bills fully subscribed

• Bond market activity remains dull following monetary policy announcement

By Wealth Trust Securities

The secondary bond market remained dull yesterday following the first monetary policy announcement at where policy rates remained steady at 14.50% and 15.50% on the Standing Deposit Facility Rate (SLDR) and Standing Lending Facility Rate (SLFR) respectively.

In morning hours of trading, selling interest on the 15.05.26 and 15.09.27 maturities saw its yields increase marginally to intraday highs of 28.80% and 28.70% respectively against its previous day’s closing levels of 27.70/80 and 28.50/60. Nevertheless, buying interest at these levels saw yields decreasing once again as the said maturities hit lows of 28.62% and 28.60% respectively. In addition, 01.05.24 maturity changed hands at levels of 31.00% to 31.10%.

The all-time high offered volume of Rs.120 billion at the weekly Treasury bill auction was fully subscribed yesterday while weighted average rates continued its decreasing trend. The 364-day maturity recorded the sharpest decline of 47 basis points to 27.78 followed by the 91-day and 182-day maturities by 17 and 35 basis points respectively to 29.91% and 28.72%.

The phase 2 of the auction will be opened for all three maturities at its weighted average rates until close of business of the day prior to settlement (i.e., 3.30 pm on 26.01.2023).

The total secondary market Treasury bond/bill transacted volume for 24 January was Rs. 4.71 billion.   

In money markets, the weighted average rates on overnight call money and repo stood at 15.38% and 15.50% respectively as the net liquidity in the system stood at a deficit of Rs. 166.55 billion yesterday. An amount of Rs. 166.55 billion was withdrawn from Central Banks SDFR (Standard Deposit Facility Rate) of 15.50%.

Forex market

In the forex market, the middle rate for USD/LKR spot contracts remained steady for a second consecutive day at Rs. 362.16 yesterday.

The total USD/LKR traded volume for 24 January was $ 61.95 million.  

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