Weekly Treasury bill averages continue to decline sharply

• Bond yields edge up further

By Wealth Trust Securities

The weekly Treasury bill auction conducted yesterday recorded an astounding outcome once again as weighted averages across the board decreased sharply for a fourth consecutive week. The market favourite 91 day bill registered the highest drop of 118 basis points closely followed by the 182 day bill and 364 day bill by 99 and 109 basis points respectively to 21.90% and 22.04%. The total offered amount of Rs. 98 billion was fully subscribed as the bids to offer ratio stood at 2.06:1. 

The secondary market bond yields were seen increasing further yesterday on the back of moderate activity. The liquid 01.06.25, 01.05.27 and 15.01.28 maturities were seen hitting intraday highs of 20.50%, 20.15% and 20.55% respectively against its previous day’s closing level of 20.15/35, 20.04/10 and 20.10/25 while two-way quotes on the rest of the yield curve were seen increasing as well.

In secondary bills, July and September 2022 maturities changed hands at levels of 16.25% to 17.00% and 20.00% respectively.

The total secondary market Treasury bond/bill transacted volume for 13 June was Rs. 2.93 billion. 

In money markets, the weighted average rates on overnight Call money and REPO stood at 14.50% each while the net liquidity deficit stood at Rs. 566.58 billion yesterday. An amount of Rs. 205.24 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 13.50% while an amount of Rs. 771.82 billion was withdrawn from Central Banks SLFR (Standard Deposit Facility Rate) of 14.50%.

Forex Market

In the Forex market, the middle rate for USD/LKR spot contracts depreciated further to Rs. 359.85 yesterday against its previous days of Rs. 359.8338.

The total USD/LKR traded volume for 13 June was $ 10.15 million.  

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