T-bill rates drop for 17th straight week at auction

Thursday, 6 March 2025 05:06 - - {{hitsCtrl.values.hits}}

Secondary Bond market closes broadly steady
Rupee depreciates marginally

By WealthTrust Securities

At the weekly Treasury bill auction conducted on Tuesday (4 March), the weighted average yields across all three offered maturities declined for the 13th consecutive week. This marks a continued downward trend, with yields on at least one tenor decreasing over the past 17 weeks. Accordingly, the weighted average rates on the 91-day tenor dropped by four basis points to 7.53%, the 182-day tenor by one basis point to 7.86%, and the 364-day tenor by one basis point to 8.34%.

Total bids received exceeded the offered amount by 1.90 times, and the entire Rs. 167 billion on offer was successfully raised at the first phase in competitive bidding.

The second phase of subscription for the auction will be opened only on the 91-day tenor and the 182-day tenor at the weighted average rates until close of business of the day prior to settlement (i.e., 3 p.m. today).

The Secondary Bond market yesterday saw yields initially continue to consolidate, trading within a narrow band on the back of healthy market activity and transaction volumes; the exception continuing to be the 2030 tenors, which saw demand cause rates to edge down further. This characterised the market prior to the release of the T-bill auction results. Post-announcement saw some very marginal profit-taking kick in, which caused yields to edge up specifically on the 2029 tenors, amidst a moderation in activity. Despite this, the rest of the yield curve closed broadly steady.

The 15.02.28 maturity was seen trading within the range of 10.00%-10.05%. The 01.07.28 maturity traded within the range of 10.21%-10.18%. The 15.09.29 maturity saw yields edge up from an intraday low of 10.71% to a high of 10.75%. Whereas the yield on the 15.05.30 and 15.10.30 maturities was observed trading down the ranges of 10.95%-10.90% and 11.00%-10.97%, respectively. Trades were witnessed on the 01.10.32 maturity within the range of 11.46%-11.45%.

The total secondary market Treasury bond/bill transacted volume for 4 March was Rs. 14.95 billion.

In money markets, the weighted average rates on overnight call money and repo stood at 7.98% and 8.02%, respectively.

The net liquidity surplus stood at Rs. 172.98 billion on Tuesday (4 March). Rs. 0.43 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 173.40 billion was deposited at the Central Bank’s SDFR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 depreciating slightly to Rs. 295.30/295.50 as against its previous day’s closing level of Rs. 295.15/295.25.

The total USD/LKR traded volume for 4 March was $ 135.36 million.

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

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