Treasury bill weighted averages decrease for a fifth consecutive week

• Bond yields continue to head south 

By Wealth Trust Securities

The declining trend in the weekly Treasury bill weighted average yields continued for a fifth consecutive week with the 91-day bill recording the steepest drop of 18 basis points to 7.05% followed by the 182-day bill recording a decline of 13 basis points to 7.84%. The 364-day bill dipped by a mere one basis point to 8.11%. The total offered amount at the auction was fully accepted for an eighth consecutive week, while the 182-day bill represented 47.97% of this volume, indicating continued market appetite for this maturity. The bid-to-offer ratio stood at 2.26:1. 

Yields in the secondary bond market decreased further yesterday, consisting of the liquid maturities of 01.12.24, 15.03.25, 15.01.26, 15.01.27 and 15.05.30 to lows of 8.90%, 9.31%, 9.70%, 10.06% and 11.08% respectively, against its previous day’s closing levels of 8.93/96, 9.35/40, 9.75/85, 10.09/12 and 11.15/23.

The total secondary market Treasury bond/bill transacted volume for 7 December was Rs. 3.6 billion.   

In money markets, the net liquidity deficit decreased to Rs. 237.81 billion yesterday as an amount of Rs. 79.37 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 5%, against an amount of Rs. 369.18 billion withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 6%. The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out amounts of Rs. 37 billion and Rs. 15 billion by way of overnight and seven-day repo auctions at weighted average rates of 5.99% each. The weighted average rates on overnight call money and repo remained steady at 5.92% and 5.97% respectively.

USD/LKR   

In the Forex market, the USD/LKR rate on spot contracts traded at a level of Rs. 203 while the overall market remained inactive yesterday.

The total USD/LKR traded volume for 7 December was $ 39.25 million.   

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