Weekly averages increase; accepted volume dips below offered volume

By Wealth Trust Securities

The total accepted volume at yesterday’s primary bill auction fell short of the total offered volume for the first time in nine weeks, as only Rs. 56.92 billion was accepted against an offered volume of Rs. 66 billion. Furthermore, weighted average yields were seen increasing by 19 basis points each on the 91-day and 182-day maturities to 7.24% and 8.03% respectively, while the 91-day saw a reversal in its declining trend for the first time in seven weeks.

Nevertheless, weighted average rate on the 364-day bill decreased by five basis points to 8.06%. The bids to offer ratio dipped to a low of 1.75:1. Given below are the details of the auction.

In the secondary bond market, yields increased marginally on the back of limited activity following the auction outcome as the liquid maturity of 15.10.27 hit an intraday high of 11.22% against the previous day’s closing levels of 11.10/17. In addition, 15.03.31 maturity changed hands at a level of 11.60% to 11.65%. In secondary bills, January and February 2022 maturities traded at levels of 7% to 7.05%, pre-auction.

The total secondary market Treasury bond/bill transacted volume for 14 December was Rs. 10.37 billion.   

In money markets, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out amounts of Rs. 37.40 billion by way of an overnight repo auction at weighted average rates of 5.99%, while an amount of Rs. 80.67 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 5%.

The net liquidity deficit was registered at Rs. 299.05 billion yesterday as an amount of Rs. 417.12 billion was withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 6%. The weighted average rates on overnight call money and repo remained steady at 5.92% and 5.98% respectively.

USD/LKR   

In the Forex market, the USD/LKR rate on spot contracts traded within a narrow range of Rs. 202.97 to Rs. 203, while the overall market remained inactive yesterday.

The total USD/LKR traded volume for 14 December was $ 42.50 million.   

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