T-bill rates continue downward trajectory; auction fully subscribed

Thursday, 6 February 2025 00:54 - - {{hitsCtrl.values.hits}}

Rupee appreciates

By WealthTrust Securities

The weighted average rates declined across all three offered maturities for the ninth consecutive week at its weekly Treasury bill auction held yesterday. As such, rates were seen continuing on a downward trajectory, with a reduction in yields observed on at least one tenor over the last 13 weeks.

Accordingly, the weighted average rates on the 91-day tenor dropped by 14 basis points to 7.79%, the 182-day tenor by nine basis points to 8.00%, and the 364-day tenor by four basis points to 8.43%.

Total bids received exceeded the offered amount by 2.22 times, and the entire Rs. 180 billion on offer was successfully raised at the first phase in competitive bidding.

The second phase of subscription for the auction will be opened across all three tenors at the weighted average rates until close of business of the day prior to settlement (i.e., 3 p.m. today).

Meanwhile, the secondary Bond market yields continued to be at elevated levels on the back of moderate volumes and transaction volumes. However, a marginal recovery was observed following the outcome at the Treasury bill auction.

The 15.12.26 maturity was seen trading at the rate of 9.10% while the 01.05.27 maturity at the rates of 9.58%-9.57%. The early 2028 15.02.28 maturity traded down the range of 10.19%-10.15%, while the mid-2028 tenor 01.05.28 and 01.07.28 maturities changed hands at the rates of 10.30% and 10.41%-10.37%, respectively. The 15.09.29 maturity saw trades down the range of 10.90%-10.84%. The 15.05.30, 15.10.30, and 01.10.32 maturities saw trades within the ranges of 11.20%-11.15%, 11.35%-11.30%, and 11.55%-11.50%.

The total secondary market Treasury bond/bill transacted volume for 3 February was Rs. 5.48 billion.

In money markets, the weighted average rates on overnight call money and repo stood at 8.00% and 8.04%, respectively.

The net liquidity surplus stood at Rs. 146.95 billion yesterday. Rs. 1.63 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 148.58 billion was deposited at the Central Bank’s SDFR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 appreciating to Rs. 298.50/298.75 as against its previous day’s closing level of Rs. 299.60/299.75.

The total USD/LKR traded volume for 3 February was $ 38.40 million.

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

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