Weekly weighted average rates increase across the board

• Bearish sentiment persists in the secondary bond market
• Rupee appreciates further

By Wealth Trust Securities

The Treasury bill auction conducted yesterday, saw weighted average yields increase across the board. Accordingly, the rate on the 91-day tenor increased by 08 basis points to 9.22%, the 182-day tenor by 22 basis points to 9.56% and the 364-day tenor by 11 basis points to 10.06%. The auction raised an amount of Rs. 146.18 billion or 94.31% against a total offered amount of Rs. 155.00 billion. The total bids received exceeded the offered amount by 1.74 times.

Strong demand continued to be observed on the short tenors, with 92.13% of the total accepted amount attributable to the 91- and 182-day tenors. In particular, maturity-wise the 91-day raised more than its respective offered amount, while the take up on the 182- and 364-day maturities were below the offered amount.

The 2nd phase of the auction will be opened on 182-day and 364-day maturities at its weighted average rates until close of business of the day prior to settlement (i.e., 4.00 p.m. on 08.08.2024).

Given below are the details of the auction;

Meanwhile, in the secondary bond market the bearish sentiment saw yields continue to rise on the back of continued selling pressure. Activity was seen at moderate levels, although significant transaction volumes were observed.

Accordingly, the 01.08.26 and 15.12.26 maturities were seen trading at the elevated levels of 10.64% and 10.85% respectively. Similarly, the yield on the 15.12.27 maturity was observed increasing from an intraday low of 11.95% to 12.03%. The 01.07.28 and 15.12.28 followed this trend with trades observed at the rates of 12.45% to 12.52% and 12.60% respectively. Additionally, the medium tenor 15.05.30 maturity was seen trading at the rate of 12.92% to 12.935%.

The total secondary market Treasury bond/bill transacted volume for 06 August was Rs. 7.48 billion.

In money markets, the weighted average rates on overnight call money and were 8.54% and 8.83%, respectively.

The net liquidity surplus stood at Rs. 88.93 billion yesterday as an amount of Rs. 108.93 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.25%. The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 20.00 billion at the weighted average rates of 8.50%.

Forex Market 

In the Forex market, the USD/LKR on spot contracts appreciated further to close the day at Rs. 301.55/301.65 against its previous day’s closing level of Rs. 302.05/302.15.

The total USD/LKR traded volume for 06 August was $ 57.50 million. 

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