Weekly bill auction sees Rs. 47.5 b on offer; inflation spikes

By Wealth Trust Securities

The weekly bill auction due today will see a total volume of Rs. 47.5 billion on offer, consisting of Rs. 13.5 billion on the 91-day maturity and Rs. 17 billion each on the 182-day and the 364-day maturities, reflecting a decrease of Rs. 18.5 billion when compared with the previous week.

At last week’s auction, the 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 total accepted volume fell short of the total offered volume for the first time in nine weeks. The weighted average rate on the 364-day bill decreased by five basis points to 8.06%.

In the secondary bond market, yields increased further yesterday with the liquid 15.10.27 maturity hitting a high of 11.57% against its previous day’s closing levels of 11.48/52. Furthermore, the 15.03.31 maturity was seen trading at a level of 11.85%. .

In secondary bill market, 28 January and 11 February 2022 maturities were seen changing hands at levels of 7.40% and 7.50% respectively.

The National Consumer Price Index (NCPI; Base 2013=100) for the month of November increased sharply to its all-time high of 11.1% on the point-to-point, when compared against its previous month’s figure of 8.3%, along with the annual average increasing as well to 6.2% from 5.7%.

The total secondary market Treasury bond/bill transacted volumes for 20 December was Rs. 6.09 billion.   

In money markets, the net liquidity deficit recorded yesterday was Rs. 339.01 billion, whilst Rs. 71.84 billion was deposited with the Central Bank under the SDFR (Standard Deposit Facility Rate) at 5.00%. In the meantime, an amount of Rs. 448.45 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) at 6%. Furthermore, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka drained out an amount of Rs. 37.60 billion by way of an 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 5.92% 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. 203.00 while the overall market remained inactive yesterday.

The total USD/LKR traded volume for 20 December was US $ 9.70 million.   

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