Weekly Treasury Bill averages down

Wednesday, 27 September 2023 00:30 - - {{hitsCtrl.values.hits}}

S&P upgrades Sri Lanka’s local currency rating
Secondary Market Bond yields steady
Rupee appreciates slightly

By Wealth Trust Securities

This week’s Treasury bill auction conducted yesterday, saw weighted average rates drop across the board. The 91-day bill saw significant demand, which led to its weighted average yield dropping steeply by 70 basis points as it received Rs. 72 billion in bids against an offered amount of only Rs 20 billion. Similarly, the 182-day and 364-day bills dropped by 25 and 02 basis points respectively to record weighted averages of 15.13% and 13.30%.

The total offered amount of Rs. 50 billion was accepted at the 1st phase of the auction. The 2nd phase of subscription, for all three maturities, will be opened until 4:00 p.m. on the day before the settlement date (i.e., 27.09.2023) at the weighted averages determined at the 1st phase of the auction. Given below are the details of the 1st phase of the auction:

Meanwhile, in some developments, the S&P Global rating agency said Sri Lanka’s local currency rating was raised to CCC+/C from SD (selective default), after concluding the domestic debt restructuring. This was expressing an improvement in the forward-looking opinion of Sri Lanka’s creditworthiness. In addition, it was reported that Sri Lanka was in talks with the ADB for up to $ 400 million in Policy-Based Loans.

The secondary bond market rates were seen quoted broadly unchanged yesterday against the previous day’s levels. As such moderate trading activity saw the liquid maturity of 01.06.26 changed hands at 15.50% to 15.60%.

In secondary market bills, October/December 2023, February and March 2024 bills traded at levels of 17.00% to 18.00%, 16.50% to 16.75% and 15.25% respectively.

The total secondary market Treasury bond/bill transacted volume for 25 September 2023 was Rs. 90.37 billion.

In money markets, the DOD (Domestic Operations Department) of the Central Bank injected liquidity by way of an overnight reverse repo auction for a volume of Rs. 22.65 billion at a weighted average rate of 11.34%. An amount of Rs. 71.48 billion was withdrawn from the Central Bank's SLFR (Standard Lending Facility Rate) of 12.00% and Rs. 24.23 billion was deposited at the Central Bank's SLDR (Standard Deposit Facility Rate) of 11.00%. The net liquidity deficit stood at Rs. 69.90 billion yesterday.

The weighted average rates on overnight call money and repo were registered at 11.47% and 11.89% respectively.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts closed the day marginally up at Rs. 323.70/324.20 as against its previous day’s close of Rs. 324.75/324.90.

The total USD/LKR traded volume for 25 September was $ 83.43 million.

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

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