Weekly Treasury bill auction will not be held

• Secondary bond market remains active as yields dip

By Wealth Trust Securities

The absence of the next weekly Treasury bill auction, led to an active secondary bond market, with yields decreasing further. Increased activity was witnessed around the liquid maturities of 15.12.21 and 01.08.26 with yields dipping to intraday lows of 11.57% and 11.77% respectively against its previous day’s closing levels of 11.70/72 and 11.98/02. Furthermore, the 01.03.21, 01.08.21, 15.10.21, 15.05.23, 15.03.25 and 15.06.27 maturities too dipped to levels of 11.40%, 11.52%, 11.47%, 11.73%, 11.75% and 11.80%. In the meantime, continued buying interest in the secondary bill market saw the 13 December 2019 bill change hands at 11.00%.

The total secondary market Treasury bond Transacted volume for 19 December was Rs. 8.68 billion.

In the money market, overnight call money and repo rates averaged 8.98% and 8.95% respectively, as the OMO Department of the Central Bank infused liquidity by way of an overnight and a seven day term reverse repo auction for successful amounts of Rs. 15.00 billion and 23 billion, at weighted average yields of 8.90% and 8.95%. The net liquidity shortfall stood at Rs. 89.37 billion.

Rupee continues to lose

The rupee on spot contracts depreciated further yesterday to close the day at levels of Rs. 181.00/15 against its previous day’s closing levels of Rs. 180.50/65 on the back of continued importer dollar demand.

The total USD/LKR traded volume for 19 December was $ 31.22 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 182.00/50; 3 months - 184.00/50 and 6 months - 187.00/50.