T-Bill auction undersubscribed for second straight week

Thursday, 3 April 2025 04:14 - - {{hitsCtrl.values.hits}}

Rates increase for first time in 20 weeks
Secondary Bond market yields surge; activity slows down

By Wealth Trust Securities

The weekly Treasury bill auction went undersubscribed at the first phase for the second consecutive week, with only 55.73% or Rs. 78.02 billion of the total Rs. 140 billion amount offered. This was despite total bids received exceeding the offered amount by 1.30 times.

Meanwhile the weighted average yield rates were seen increasing across the board for the first time in 20 weeks. Accordingly, the weighted average rate on the 91-day tenor increased by 9 basis points to 7.59%, the 182-day tenor by 7 basis points to 7.91% and the 364-day tenor by 6 basis point to 8.31%.

The 2nd phase of subscription for the auction will be opened for all three maturities at the weighted average rates until close of business of the day prior to settlement (i.e., 3 p.m. on 3 April).

In the secondary bond market, rates were seen edging up during the day with a notable surge following the Treasury Bill auction results. Market activity and transaction volumes were seen at relatively subdued levels.

The 01.08.26 maturity was seen changing hands at levels of 8.75%-8.77%. The 01.05.27 maturity was seen trading at the rate of 9.40% while the 15.09.27 and 15.10.27 maturities within the range of 9.50%-9.60%. The 15.09.29 and 15.12.29 maturities traded at the rates of 10.45%-10.50% and 10.55% respectively.

The total secondary market Treasury Bond/Bill transacted volume for 1 April was Rs. 12.20 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 7.96% and 7.96% respectively.

The net liquidity surplus stood at Rs. 174.44 billion yesterday. Rs. 0.06 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 174.38 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 7.50%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts closed the day depreciating to Rs. 296.02/296.07 as against its previous day’s closing level of Rs. 296.10/296.20.

The total USD/LKR traded volume for 1 April was $ 100.78 million.

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

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