Three months Treasury Bill average continues to edge down

• Secondary Bond Market activity remains high; yields broadly steady
• Rupee continues to slide down

By Wealth Trust Securities

This week’s Treasury bill auction conducted yesterday, retained its bullish momentum, mainly on the 91-day bill as its weighted average dipped by a further 17 basis points to 15.93%. The three months continued to see the most demand with Rs. 136.63 billion in bids received for an offered amount of only Rs. 65 billion. The 182-day bill and 364-day bill weighted average rates remained unchanged at 14.93% and 13.02% respectively. The total bids received was 1.92 times greater than the total offered amount.

An amount of Rs. 138.58 billion or 95.57% was raised of the total offered amount of Rs. 145 billion at the first phase of the auction. The second phase of subscription, for the 91-day and 364-day maturities will be open until 4 p.m. on the day before the settlement date (i.e., 02.11.2023) at the weighted averages determined at the first phase of the auction. Given below are the details of the first phase of the auction.

The secondary bond market continued to see considerably high trading activity yesterday but however yields were seen closing the day broadly steady. Trading was seen across the yield curve on the liquid maturities of 01.05.24, the three 25’s (i.e., 15.01.25, 01.06.25 and 01.07.25), 15.05.26, two 27’s (i.e.; 01.05.27 and 15.09.27), two 28’s (i.e., 15.01.28 and 01.07.28), 15.07.29 and 01.07.32 within the ranges of 15% to 14.90%, 15.05% to 14.70%, 15%, 15% to 15.10%, 15% to 14.75%, 14.60% to 14.40% and 14.15% respectively. 

In secondary market bills, February 2024 maturities were seen changing hands at 15.70% to 15.50%. The total secondary market Treasury bond/bill transacted volume for 31 October 2023 was Rs. 15.27 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 10.26% and 11% respectively while the net liquidity stood at a deficit of Rs. 24.92 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 35.33 billion at a weighted average rate of 10.10%. An amount of Rs. 24.35 billion was withdrawn from Central Bank’s SLFR (Standard Lending Facility Rate) of 11% while an amount of Rs. 84.60 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 10%

 Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day edging down to Rs. 328/328.30 against its previous day’s closing level of Rs. 327.80/328.

The total USD/LKR traded volume for 31 October was $ 129.48 million. 

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