Weekly T-Bill averages dip sharply; hit 40-week lows

Thursday, 6 April 2023 00:46 - - {{hitsCtrl.values.hits}}

Bond market yields follow suit; secondary market yields hit 6-month low
CBSL policy rates held steady

By Wealth Trust Securities

The weekly Treasury bill auction held on Tuesday, 4 April due to a shortened trading week saw its weighted averages plummet once again to hit levels last seen in June/July 2022.

The 364-day or one-year bill led the way as it dipped by a mammoth 194 basis points to 22.37% followed by the 91-day and 182-day maturities by 187 and 169 basis points respectively to 24.12% and 24.10%.

The total offered amount of Rs. 110 billion was successfully accepted at the auction as its bids to offer ratio stood at 1.61:1. The phase 2 of the auction was opened only for the 91-day and 182-day maturities at its weighted average rates until 4:15 p.m. on Tuesday.

The activity levels in the secondary bond market remained high on Tuesday as continued buying interest drew yields lower. The liquid 01.07.25, 15.05.26 and two 2027’s (i.e., 01.05.27 and 15.09.27) maturities was seen changing hands at lows of 26.40%, 25.65%, 25.60% and 25.30% respectively against its previous day’s closing levels of 28.75/85, 26.50/75 and 26.40/60 each. The total secondary market Treasury bond/bill transacted volume for 3 April was Rs. 19.30 billion.

Meanwhile, the Central Bank of Sri Lanka kept its policy rates unchanged at its third review meeting announced on 4 April at 4:45 p.m. The Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) remained at 15.50% and 16.50% respectively.

In money markets, the weighted average rate on overnight call money and repo stood at 16.48% and 16.50% respectively while an amount of Rs. 249.90 billion was withdrawn from Central Bank’s SLFR (Standard Lending Facility Rate) of 16.50%. The net liquidity deficit stood at Rs. 27.52 billion yesterday as an amount of Rs. 222.38 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 15.50%.

Forex market

In the forex market, the USD/LKR spot contracts closed the day at Rs. 319.00/323.00 yesterday against its previous day’s closing level of Rs. 321.00/324.00.

The total USD/LKR traded volume for 3 April was $ 91.25 million.

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