Weekly auction undersubscribed for first time in 8 weeks

• 91 day bill weighted average increases

By Wealth Trust Securities 

The weekly Treasury bill auction was undersubscribed for the first time in eight weeks yesterday as only Rs. 64.56 billion in total was accepted against a total offered amount of Rs. 80 billion. Furthermore, the market favourite 91 day Treasury bill weighted average rate was seen increasing yesterday for the first time in four weeks to 8.61%, reflecting an increase of 11 basis points over its previous week. 

The 91 day bill continued to dominate the auction, representing 99.57% of the total accepted amount. The weighted average rates on the 182 day and 364 day maturities decreased by 01 and 04 basis points respectively to 8.53% each while the bid to offer ratio decreased to 1.75:1. 

Meanwhile, activity in the secondary bond market remained dull yesterday as majority market participants opted to be on the side-lines. Limited trades were witnessed on the 2025’s (i.e. 15.03.25 and 01.08.25) at levels of 11.00% and 11.15% to 11.20% respectively. In the secondary bill market, maturities of 6 May and 20 May changed hands at levels of 8.50% to 8.57%, pre-auction. 

The total secondary market Treasury bond/bill transacted volume for 22 February was Rs. 2.50 billion.   

In money markets, the weighted average rates on overnight Call money and REPO remained mostly unchanged at 6.48% and 6.50% respectively as an amount of Rs. 690.47 billion was withdrawn from Central Banks Standard Deposit Facility Rate (SLFR) of 6.50%. The net liquidity deficit was registered at Rs. 628.26 billion yesterday as an amount of Rs. 62.22 billion was deposited at Central Banks Standard Deposit Facility Rate (SDFR) of 5.50%. 



Forex market 

In the forex market, overall activity continued to remain moderate yesterday.

The total USD/LKR traded volume for 22 February was $ 37.50 million.  

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