T-bill rates continue to drop

• Secondary bond market yields close broadly steady
• Rupee depreciating

By Wealth Trust Securities

At the weekly Treasury bill auction held yesterday, weighted average yield rates declined across three offered maturities. This marks a continued downward trend, with yields on at least one tenor decreasing over the past 19 weeks consecutively. Accordingly, the weighted average rates on the 91-day tenor dropped by 02 basis points to 7.50%, the 182-day tenor by 02 basis points to 7.84% and the 364-day tenor by 09 basis point to 8.25%.

Total bids received exceeded the offered amount by 2.12 times, and the entire Rs. 143 billion on offer was successfully raised in the 1st phase in competitive bidding. Maturity-wise: the 91- and 182-day tenors raised less than their respective offered amounts, with the shortfall being covered by raising more on the 364-day tenor.

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., 3.00 p.m. on 20.03.2025). Given below are the details of the auction;

Meanwhile, the secondary bond market yesterday consolidated, with yields trading within a narrow band on the back of healthy market activity and transaction volumes.  Despite some minor profit taking pressure, yields were seen closing the day broadly steady.

Accordingly, the 01.08.26 maturity was seen trading within the range of 8.60%-8.50%. The 01.05.28 and 01.07.28 maturities were seen trading at the rates of 9.82%-9.80% and 9.85% respectively. The 15.06.29 and 15.09.29 maturities traded at the rates of 10.10% and 10.20%-10.15% respectively. The 15.05.30 and 01.12.31 maturities changed hands at the rates of 10.25% and 10.67%-10.65% respectively. 

The total secondary market Treasury bond/bill transacted volume for 18 March 2025 was Rs. 24.06 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 7.96% and 7.97% respectively. The net liquidity surplus stood at Rs. 172.12 billion yesterday. Rs. 9.55 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 181.67 billion was deposited at Central Banks SDFR (Standard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. 296.30/296.40 as against its previous day’s closing level of Rs. 296.05/296.15. 

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