• Bond yields ease further
• Monitory policy announcement in focus

By Wealth Trust Securities 

The downward momentum at the weekly Treasury bill auction was seen continuing at its auction held yesterday as weighted average rates decreased across all three maturities for a second consecutive week. 

The market favourite 91-day bill maturity recorded a drop of 14 basis points to 32.92% while the 182 day and 364-day bills registered drops of 06 and 01 basis points respectively to 32.45% and 29.52%. However, the auction went undersubscribed as only Rs. 74.86 billion was accepted in total against a total offered volume of Rs. 80 billion while the second phase of the auction will not be opened. 

Meanwhile, activity in the secondary bond market increased further yesterday as the yields on the liquid maturities of 01.07.25, 15.01.28 and 01.07.32 decreased further to hit lows of 30.60%, 30.25% and 28.30% respectively against its opening highs of 31.08%, 30.85% and 29.02%. 

However, selling interest following the bill auction saw yields increasing once again as the 01.07.25 hit 31.00%. In addition, maturities of 01.06.25, 15.07.29 and 15.05.31 traded at levels of 30.50%, 29.75% to 30.00% and 28.45% to 28.50% as well. In secondary bills, 17 February maturity traded at levels of 32.25% to 32.27%, pre-auction. This was ahead of the eighth and last monitory policy announcement scheduled for the year 2022 due today at 7:30 a.m. The Monetary Board of the Central Bank of Sri Lanka kept policy rates unchanged at 14.50% and 15.50% on its Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) respectively at its previous announcement on 6 October.

The total secondary market Treasury bond/bill transacted volume for 22 November was Rs. 5.18 billion.   In money markets, no transactions were report on overnight Call money and REPO while an amount of Rs. 330.65 billion was deposited at Central Bank’s Standard Deposit Facility Rate (SDFR) of 14.50%. The net liquidity deficit stood at Rs. 158.04 billion as an amount of Rs. 488.69 billion was withdrawn from Central Bank’s Standard Lending Facility Rate (SLFR) of 15.50%.

Forex market 

In the forex market, the middle rate for USD/LKR spot contracts remained steady at Rs. 363.50 yesterday. The total USD/LKR traded volume for 22 November was $ 95.21 million.  

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

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