Weekly auction fully subscribed for second consecutive week

• Averages dip across the board
• NCPI drops for a 2nd consecutive month

By Wealth Trust Securities

The weekly Treasury bill auction was fully subscribed for a second consecutive week due to continued demand for the market favourite 91-day bill as its accepted amount was registered at Rs. 67.31 billion against its offered amount of Rs. 40 billion.

The 91-day bill weighted average rate decreased by 13 basis points to 32.67% followed by the 182-day and 364-day bills by 3 and 2 basis points respectively to 32.23% and 29.30%.

The phase 2 of the auction will be opened for the 182-day and 364-day maturities at its weighted average rates until close of business on the day prior to settlement (i.e., 3:30 p.m. on 22.12.22).

In the secondary bond market, activity remained moderated yesterday with most market participants opting to be on the sidelines. Trades were reported on 01.05.24, 15.05.26, 15.07.29, 15.05.31 and 01.07.32 maturities at levels of 32.07% to 32.15%, 31.00% to 31.10%, 28.00% to 28.25%, 26.90% and 26.00% to 26.40% respectively.

The National Consumer Price Index (NCPI) or national inflation for the month of November was seen decreasing for a second consecutive month to 65.0% on its point to point as against 70.6% recorded in October while its annualised rate increased to 42.7% from 42.2%. The total secondary market Treasury bond/bill transacted volume for 20 November was Rs. 2.64 billion. In money markets, the net liquidity deficit stood at Rs. 224.00 billion yesterday as an amount of Rs. 337.43 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 14.50% against an amount of Rs. 561.43 billion withdrawn from Central Bank’s SLFR (Standard Lending Facility Rate) of 15.50%. The weighted average rates on overnight Call money and REPO rates remained steady at 15.50% each.

Forex market

In the forex market, the middle rate for USD/LKR spot contracts remained broadly steady at Rs. 363.16 yesterday against its previous day’s closing level of Rs. 363.1612.

The total USD/LKR traded volume for 20 December was $ 99.21 million.

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