Treasury bill averages hit over 50-week lows

• 1 year bill plunges by 381 basis points
• Bond yields follow suit
• Rupee appreciates marginally

 

By Wealth Trust Securities 

The first Treasury bill auction conducted following the policy rate cut of 250 basis points saw weighted averages plunge by a minimum 244 basis points and above on the back of a bullish market sentiment yesterday. The 1 year or 364-day bill led the way by plunging 381 basis points (3.81%) to 19.10% followed by the 182-day by 339 basis points (3.39%) to 21.90%. The 1-year T-bill average was seen falling below the 20.00% psychological level for the first time since an 11 April 2022 auction. The 91-day bill recorded a drop of 244 basis points (2.44%) to 23.21%.

The total offered amount of Rs. 140 billion was successfully accepted at the auction while the 2nd phase of the auction will be opened on all three maturities at its weighted average rates until close of business of the day prior to settlement (i.e., 3.30 pm on 08.06.23). Given below are the details of the auction,

Meanwhile, the secondary bond market continued to remain active yesterday as the liquid maturities of 01.07.25 and 2027’s (i.e., 01.05.27 & 15.09.27) changed hands at levels of 25.50% to 26.75%, 23.10% to 23.80% and 23.20% to 23.80% respectively against its previous day’s closing levels of 26.50/00 and 24.00/05 each. In addition, maturities of two 2025’ (i.e., 15.01.25 & 01.06.25) and 15.01.28 traded at levels of 26.00% to 26.50% and 22.00% to 22.50% respectively as well.

The total secondary market Treasury bond/bill transacted volume for 6 June 2023 was Rs. 19.17 billion.

In money markets, overnight call money and repo averaged 13.94% and 14.00% respectively as the DOD (Domestic Operations Department) of Central Bank was seen injecting an amount of Rs. 55.00 billion on an overnight basis by way of a Reverse Repo auction at a weighted average of 13.45% yesterday. The net liquidity shortfall stood at Rs. 115.78 billion yesterday as a further amount of Rs. 71.46 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 14.00% against an amount of Rs. 10.68 billion deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 13.00%.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts traded within the range of Rs. 290.25 to Rs. 291.50 yesterday against its previous day’s closing of Rs.291.50/292.50 and closed the day at Rs. 291.00/292.00. The total USD/LKR traded volume for 6 June was $ 108.50 million

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