Third consecutive week of increases at weekly Treasury bill auction

By Wealth Trust Securities

The upward trend in weighted averages at the weekly Treasury bill auction continued for a third  consecutive week, with the total accepted amount falling short of the total offered amount for an fifth consecutive week, at its auction held yesterday. 

The weighted averages on the 364 day and 182 day maturities increased by 09 and 02 basis points respectively to 9.41% and 9.10% respectively while the 91 day maturity, which was offered after laps of one week increased by 07 basis points to 8.78%. Only an amount of Rs.16.33 billion was accepted in total at the auction against its total offered amount of Rs.20.5 billion despite the bids to offer ratio increasing to a three week high of 2.38: 1.

Nevertheless secondary market bond yields were seen decreasing further yesterday with the maturities of 01.03.21, 01.08.21, 01.10.22, 15.05.23, 15.06.27, 01.09.28 and 15.05.30 hitting intraday lows of 10.02%, 10.08%, 10.13%, 10.20%, 10.35%, 10.40% and 10.65% respectively against its previous day’s closing levels of 10.00/10, 10.05/15, 10.18/23, 10.20/30, 10.45/60, 10.50/70 and 10.65/75 on the back of continued buying interest.

The total secondary market Treasury bond/bill transacted volumes for the 10th of October 2017 was Rs.5.4 billion.

In money markets, the overnight call money and repo rates remained mostly unchanged to average at 8.14% and 7.92% respectively as the net surplus liquidity in the system increased to Rs.15.46 billion yesterday. The OMO Department of the Central Bank of Sri Lanka drained out an amount of Rs.7.86billion on an overnight basis by way of a repo auction at a weighted average of 7.25%. 

Rupee dips further

In the Forex market, the USD/LKR spot rate was seen depreciating further yesterday to close the day at Rs.153.50/55 against its previous day’s closing levels of Rs.153.40/50 on the back of continued importer demand.

The total USD/LKR traded volume for 10 October was $ 83.30 million.

Some of the forward USD/LKR rates that prevailed in the market were: one month – 154.20/35; three months – 156.10/20; and six months – 158.30/45.