Secondary bond market yields remain broadly steady

• Money market liquidity turns negative for first time in five weeks

By Wealth Trust Securities

Secondary bond market yields remained broadly unchanged yesterday with a limited amount of trades consisting of the two 2021s (i.e. 01.03.21 and 01.05.21), two 2022s (i.e. 01.07.22 and 01.10.22), two 2023s (i.e. 15.03.23 and 15.05.23), 01.08.24, 01.08.26 and the 15.06.27 seen at levels of 10.05% to 10.10%, 10.35% to 10.40%, 10.40% to 10.50%, 10.50%, 10.60% to 10.62% and 10.65% respectively. Furthermore, on the short end of the yield curve, the 15.1.19 maturity was seen changing hands at 9.25% while the 01.5.19 was traded at 9.90%.

The total secondary market Treasury bond/bill transacted volume for 16 May 2018 was Rs.9.61 billion. In money markets, the net liquidity position in the system was seen turning negative for the first time in five weeks to record a net shortfall of Rs.0.40 billion yesterday. The Open Market Operations(OMO) Department of the Central Bank was seen draining out an amount of Rs. 5 billion on an overnight basis by way of a repo auction at a weighted average of 7.50% as call money and repo averaged 7.90% and 7.92% respectively.

Rupee appreciates marginally

In the Forex market, the value of the rupee appreciated further as the USD/LKR spot rate was seen closing the day at Rs.157.80/00 against its previous day’s closing levels of Rs.158.10/30, on the back of selling interest by banks.

The total USD/LKR traded volume for 16 May 2018 was $ 51.00 million. Some of the forward USD/LKR rates that prevailed in the market were 1 Month -  158.70/90; 3 Months - 160.10/30 and 6 Months - 162.45/60.