Treasury bill weighted averages crash

• Liquidity turns positive for the first time in over five months
  
   

By Wealth Trust Securities

The weekly Treasury bill weighted averages at yesterday’s auction were seen continuing its aggressive decreasing trend as its bids to offer ratio increased to a 13-week high of 3.80:1. The 364-day bill recorded the sharpest decline of 25 basis points to 10.15% closely followed by the 91-day and 182-day bills by 15 and 17 basis points to 9.24% and 9.50% respectively. The exact offered amounts of Rs. 4 billion and Rs. 20 billion each were accepted at the auction.  

In the secondary bond market, yields of the liquid maturities across the curve consisting of the two 2021’s (i.e. 01.08.21 and 15.12.21), 15.03.22, 15.03.24, 01.08.26, two 2027’s (i.e. 15.01.27 and 15.06.27) and 01.05.29 were seen decreasing further to intraday lows of 10.41%, 10.38%, 10.60%, 10.88%, 11.02%, 11.16%, 11.20% and 11.29% respectively against its previous day’s closing levels of 10.47/50, 10.52/56, 10.69/70, 10.92/95, 11.05/15, 11.16/20, 11.20/28 and 11.33/37. 

Furthermore, maturities consisting of 2023’s (i.e. 15.03.23, 15.05.23, 15.07.23 and 15.12.23) were traded within the range of 10.80% to 10.86% respectively as well. In the secondary bill market, March 2020 maturities were traded at 10.00%, post auction. The total secondary market Treasury bond/bill transacted volumes for 2 April was Rs. 11.82 billion.

The overnight money market liquidity was seen turning positive for the first time in over five months yesterday to record a net surplus of Rs. 16.64 billion. The overnight call money and repo rates averaged 8.52% and 8.65% respectively as the Open Market Operations (OMO) department of the Central Bank of Sri Lanka injected amounts of  Rs. 5 billion and Rs. 10 billion on an overnight and eight-day basis at weighted averages of 8.50% and 8.55% respectively.  

 

Rupee closes broadly steady  

In the Forex market, the USD/LKR rate on the spot contracts was seen closing the day broadly unchanged at Rs. 174.55/75 on the back of an equilibrium market.

The total USD/LKR traded volume for 2 April was $ 80.90 million.

Some of forward USD/LKR rates that prevailed in the market were 1 Month – 175.50/80; 3 Months – 177.35/75; and 6 Months – 180.25/75.