Weekly Treasury bill auction in focus

•  Bond market activity picks up

By Wealth Trust Securities

The weekly Treasury bill auction due today will see a total volume of Rs. 87.5 billion on offer, an increase of Rs. 2.5 billion over its previous week’s total offered volume. This will consist of Rs. 35 billion on the 91 day, Rs. 27.5 billion on the 182 day and Rs. 25 billion on the 364 day maturities. 

At last week’s auction, weighted average rates decreased for a second consecutive week to 28.86%, 29.24% and 29.53%, recording declines of 264, 73 and 29 basis points respectively. The total offered amount of Rs. 85 billion was successfully accepted at the auction while the additionally offered amount on the 182 day and 364 day maturities totalling Rs. 21.25 billion was taken up as well at its phase II of the auction.

Meanwhile, activity in the secondary bond market increased marginally yesterday as the liquid 01.06.25 maturity changed hands within the range of 27.90% to 27.93%. In addition, the 15.07.29 maturity changed hands at 25.75% as well.  In the secondary bill market, October 2022 and January 2w023 maturities traded at levels of 26.50% to 27.02% and 28.00% respectively.

The total secondary market Treasury bond/bill transacted volume for 1 August was Rs. 7.81 billion.   

In money markets, the net liquidity deficit stood at Rs. 460.82 billion yesterday as an amount of Rs. 296.15 billion was deposited at Central Bank’s Standard Deposit Facility Rate (SDFR) of 14.50% against an amount of Rs. 756.98 billion withdrawn from Central Bank’s Standard Lending Facility Rate (SLFR) of 15.50%. The weighted average rates on overnight Call money and REPO stood at 15.50% each.

Forex market 

In the forex market, the middle rate for USD/LKR spot contracts remained steady at Rs. 361.00 yesterday. The total USD/LKR traded volume for 1 August was $ 6.49 million.  

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