Treasury bill averages continue to free fall

• Bond yields decreases further
• Rupee continues to appreciate

By Wealth Trust Securities

The weekly Treasury bill auction conducted yesterday saw its weighted average on a free fall once again, with the 91-day bill leading the way as it plunged by 171 basis points to 26.23%.

This was closely followed by the 182-day bill and 364-day bill by 122 and 160 basis points respectively to 26.12% and 24.32%. The total offered amount of Rs. 125 billion was fully subscribed as the bids to offer ratio stood at 1.93:1.

The Phase 2 of the auction will be opened for all three maturities at its weighted average yields, until close of business today. (i.e., 3.30 pm on 23.03.2023).

The persistent buying interest in the secondary bond market led to yields decreasing further yesterday. The yields on the liquid maturities of 01.07.25 and 15.09.27 hit intraday lows of 30.00% and 27.80% respectively against its previous day’s closing levels of 30.25/75 and 27.90/00. In addition, the 01.05.24, 01.06.25, 15.05.26 and 15.01.28 maturities traded at levels of 29.75% to 30.00%, 30.00%, 28.00% to 28.50% and 26.00% respectively as well.

The total secondary market Treasury bond/bill transacted volume for 21 March 2023 was Rs. 25.05 billion.  

In money markets, the overnight net liquidity deficit was Rs. 178.50 billion yesterday with the said amount being withdrawn from Central Banks SLFR (Standard Lending Facility Rate) at 16.50%. The weighted average rates on overnight call money and REPO were at 16.50% each.

Forex Market

In the Forex market, the USD/LKR rate spot contracts were traded within the range of Rs. 315 to Rs. 320 yesterday against its previous day’s range of Rs. 321.00/323.00 and closed the day at Rs. 318.00/320.00.The total USD/LKR traded volume for 21 March was $ 99.70 million. 

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