Weekly averages continue to decrease

By Wealth Trust Securities

The weighted averages at the weekly Treasury bill auction held yesterday continued to decrease, with the 364 day bill maturity decreasing by 06 basis points to 9.59%, and the 91 day bill by 05 basis points to 8.10%. The total offered amount of Rs. 28 billion was fully accepted with the bids to offer ratio increasing to 3.16:1. 

This was ahead of the Treasury bond auctions due today, where a total amount of Rs. 25 billion will be on offer, consisting of Rs. 10 billion on a 2.07 year maturity of 15.12.2020 and Rs.15 billion on a 7.05 year maturity of 15.10.2025. The previous Treasury bond auctions conducted on 28 March for the maturities of 15.03.23 and 01.09.28 recorded weighted averages of 10.68% and 11.18% respectively. The Central Bank of Sri Lanka decreased its Standing Lending Facility Rate (SLFR) by 25 basis points at its second monetary policy announcement for the year 2018 announced on 4 April.

Meanwhile, activity in the secondary bond market continued to be moderate, with yields increasing marginally on limited trades on the maturities of 01.03.21, 15.03.23, 01.08.26 and 01.09.28 at levels of 9.85% to 9.90%, 10.14% to 10.15%, 10.25%, and 10.37%, respectively. However in the secondary bill market, considerable volumes on the September, October and November 2018 maturities were seen changing hands at levels of 8.50%, 8.70% and 8.80% to 9.05% respectively, while the 364 day bill changed hands at 9.55% post auction outcome.

The total secondary market Treasury bond/bill transacted volumes for 24 April was Rs. 2.36 billion.

Meanwhile in money markets, the Open Market Operations (OMO) Department of Central Bank drained out an amount of Rs. 30 Billion on an overnight basis at a weighted average of 7.48%, as the net surplus liquidity increased further to Rs. 31.01 Billion yesterday. The overnight call money and repo rates averaged 7.84% and 7.92% respectively.

Rupee hits fresh low

The depreciating trend in the USD/LKR rate on spot contracts continued yesterday, as it hit a fresh low of Rs.157.65 before closing at Rs.157.60/80 against its previous day’s closing levels of Rs.157.20/30 on the back of sustained importer demand.

The total USD/LKR traded volume for 24 April was $67.00 million.

Some forward USD/LKR rates that prevailed in the market: 1 Month - 158.35/45; 3 Months - 159.80/00; 6 Months - 162.00/25