T-bill averages remain static for first time in five weeks

• Auction undersubscribed
• Secondary bond market yields edge down
• Rupee dips marginally

 By Wealth Trust Securities

At the weekly Treasury bill auction held yesterday, the weighted average rates remained unchanged, after four consecutive weeks of increases. The yield on the 91-day maturity was recorded at 10.07%, the 182-day maturity at 10.19%, and the 364-day maturity at 10.31%.

The auction went partially undersubscribed at its 1st phase, as only 92.46% or Rs. 175.671 billion was raised out of the total offered amount of Rs. 190.00 billion.

The 2nd phase of subscription, for the 182- and 364-day maturities will be opened until 4:00 p.m. on the day before the settlement date (i.e., 04.07.2024) at the respective weighted averages determined at the 1st phase of the auction.  

Meanwhile, the secondary bond market rallied yesterday, following the announcement of the T-bill auction results, on the back of increased activity and transaction volumes. Accordingly, the 2026 tenors of 01.06.26 and 01.08.26 were seen dropping to intraday lows of 10.70% from intraday highs of 10.80%. Similarly, the 01.05.28 maturity witnessed strong demand that resulted in its yield dropping from 12.00% to 11.90%, on the back of robust volumes. This trend was mirrored on the other 2028 tenor of 15.02.28 and 15.03.28 which hit intraday lows of 11.85% each as against highs of 11.90%. The 15.09.29 maturity also experienced some bullish momentum which drove its yield down from 12.11% to 12.05%, while the 01.12.31 maturity was observed trading at 12.15% on large volumes. 

The total secondary market Treasury bond/bill transacted volume for 2 July was Rs. 17.01 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 8.76% and 9.14% respectively while the net liquidity was a surplus Rs. 95.41 billion yesterday. An amount of Rs. 115.09 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.50%, while an amount of Rs. 4.20 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 9.50%

Further, the DOD (Domestic Operations Department) of Central Bank conducted an overnight reverse repo auction amounting to Rs. 15.48 billion at the weighted average rate of 8.68%.

 Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day down at Rs. 304.20/304.50, against its previous day’s closing level of Rs. 303.10/303.30.

The total USD/LKR traded volume for 2 July was $ 146.58 million.

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