Weekly averages continue to increase steeply 

By Wealth Trust Securities

The Primary Treasury auctions in Sri Lanka continued its steep increasing trend on its weighted averages at its Treasury bill auctions, conducted yesterday. The 91 day and 182 day bills recorded the sharpest increases of 22 basis points and 23 basis points respectively, to 8.24% and 8.52%, closely followed by the 364 day bill by 17 basis points, to 9.45%. The total offered amount of Rs. 30 billion was subscribed for at the auction as the bid to offer ratio increased to a three week high of 2.52:1. 

The secondary bond market activity dried up considerably yesterday with yields edging up on thin volumes. Selling interest on the maturities of the three 2021’s (i.e. 01.03.21, 01.08.21 & 15.12.21), the two 2026’s (i.e. 01.06.26 and 01.08.26) and the 15.05.30 saw its yields edge up to intraday highs of 9.85%, 10.05%, 10.00%, 10.38%, 10.40% and 10.62% respectively against its previous days closings of 9.75/85, 9.85/95, 9.90/00, 10.33/40, 10.32/40 and 10.45/50. On the short end of the curve, the 01.05.20 was seen changing hands within the range of 9.65% to 9.70% as well.

The total secondary market Treasury bond/bill transacted volumes for 20 February was Rs. 8.96 billion.

Meanwhile in money markets, the overnight call money and repo rates averaged at 8.14% and 7.59% respectively as the OMO (Open Market Operations) Department of the Central Bank of Sri Lanka was seen draining out an amount of Rs. 10.00 billion on an overnight basis by way of a Repo auction at a weighted average of 7.25%. The net liquidity surplus increased to Rs. 15.01 billion yesterday.

Rupee appreciates

The USD/LKR rate was seen appreciating for the first time in four days yesterday to close the day at Rs. 155.15/25 against its previous closing of Rs. 155.40/50 on the back of selling interest by banks.

The total USD/LKR traded volume for 20 February 2018 was $ 114.45 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 155.90/10, 3 Months - 157.55/70, 6 Months - 159.95/10.