T-bill weighted averages drop

• Secondary bond market remains bullish; rupee depreciates

By Wealth Trust Securities

At the weekly Treasury bill auction conducted yesterday, yields were seen declining sharply on the 91 day and 182-day tenors. The weighted average rate for the 91-day tenor dropped by 43 basis points to 10.06%, while the 182-day tenor decreased by 35 basis points to 10.37%. The 364-day tenor saw a marginal decline of 1 basis point, bringing the rate to 10.04%. Total bids received exceeded the offered amount by more than two folds, and the full Rs. 142.50 billion on offer was successfully raised at its 1st phase.

The 2nd phase of the auction will be opened across all 3 tenors at the weighted average rates until close of business of the day prior to settlement (i.e., 4.00 p.m. on 03.10.2024). 

The Secondary Bond Market retained its bullish momentum yesterday. Strong buying interest pushed yields down further on the back of healthy market activity and transaction volumes.

Accordingly, the shorter tenor 15.12.26 traded lower, ranging down from 10.70% to 10.50%. The 15.12.27 maturities saw yields decline from 11.55% to 11.25%. Yields on the 2028 tenors, specifically the liquid 15.02.28 maturity dropped to an intraday low of 11.45%, down from an intraday high of 11.80%. The 01.07.28 maturity followed suit, with yields declining from an intraday high of 11.85% to a low of 11.55%. Similarly, the yield on the popular 15.06.29 maturity declined from 11.95% to 11.70% intraday. Additionally, trades were observed on the medium tenor 15.10.30 and 01.12.31 maturities trading down from an intraday high of 12.24% to a low of 12.20% and at the rate of 12.25% respectively. 

The total secondary market Treasury bond/bill transacted volume for 1 October was Rs. 17.83 billion.

In money markets, the weighted average rates on overnight call money and repo stood at 8.64% and 8.76% respectively.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of overnight reverse repo auction for a total volume of 

Rs. 34.87 billion at a weighted average rate of 8.48%.

The net liquidity stood at a surplus of Rs. 90.96 yesterday. An amount of 

Rs. 126.71 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 9.25% as against an amount of Rs. 0.88 billion deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.25%. 

Forex market 

In the Forex market, the USD/LKR rate on spot contracts depreciated to close the day at Rs. 296.40/296.80 against its previous day’s closing level of Rs. 294.75/295.00.

The total USD/LKR traded volume for 1 October was $ 91.95 million.

 

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