Weekly bill auction fully subscribed for a second consecutive week

• Secondary market bond yields dip ahead of T-Bond auctions

The total offered volume at a weekly Treasury bill auction was fully subscribed for a second consecutive week at its auction held yesterday as the bids-to-offer ratio increased to a 67-week high of 3.81:1. 

The total offered amount of Rs. 56.5 billion was all but met on the 91-day bill alone, as its weighted average rate increased by four basis points to 8.43%. The weighted average rate on the 364-day bill maturity reflected an increase of one basis point while all bids received for the 182-day bills were rejected. 

Given below are the details of the auction:

In the secondary bond market, yields declined marginally following the auction outcome as the liquid maturities of 15.12.23 and 15.01.27 hit intraday lows of 9.25% and 11.25% respectively against its previous day’s closing levels of 9.40/55 and 11.25/40. In addition, 15.11.23 maturity changed hands at a level of 9.20%. In secondary bills, January 2022 maturities traded at levels of 7.90% to 8% post-auction.

Today’s Treasury Bond auctions will have on offer an amount of Rs. 35 billion in total, consisting of Rs. 15 billion of the 15.03.25 maturity and Rs. 20 billion of the 01.09.28 maturity. The weighted average yields at the bond auctions conducted on 12 October were 9.36%, 11.14% and 11.23% for the maturities of 15.12.23, 15.01.27 and 01.10.32 respectively. The second phase of the auction was opened for the undersubscribed 15.12.23 and 15.01.27 maturities while a direct issuance window was opened for the fully subscribed 01.10.32 maturity. 

The total secondary market Treasury bond/bill transacted volume for 26 October 2021 was Rs. 1.57 billion.   

In money markets, the net liquidity deficit stood at Rs. 157.74 billion yesterday as an amount of Rs. 84.54 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 5% against an amount of Rs. 257.64 billion withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 6.%.  

In addition, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out an amount of Rs. 15.36 billion by way of overnight repo auction at a weighted average rate of 5.99%. The weighted average rates on overnight call money and repo remained mostly unchanged at 5.94% each.  

USD/LKR   

In the Forex market, the USD/LKR rate on spot contracts traded at level of Rs. 202.97 to Rs. 203 yesterday.

The total USD/LKR traded volume for 26 October was $ 36.25 million.   

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