Activity in secondary bond markets moderate

By Wealth Trust Securities

Activity in secondary bond markets moderated yesterday, with the market sentiment turning bearish.

Limited trades of the 01.03.21 and 01.08.26 maturities were witnessed at levels of 12.00% and 12.30% to 12.35%. In the meantime, foreign investors continued selling the 01.11.19 and 01.08.21maturities at yields of 11.80% and 12.17%.

In money markets, the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka, was seen mopping up excess liquidity, by the outright sale of Treasury bills and an overnight repo auction. 

The bill auction drained out an amount of Rs.1.1 billion in total, against an offered amount of Rs.10 billion, at a weighted average of 8.39% for a period 35 days, while the overnight auction attracted an amount of Rs.84.09 billion at a weighted average rate of 7.40%.

The net surplus liquidity stood at Rs.98.09 billion, resulting in the overnight call money and repo rates decreasing  further to average at 8.33% and 8.51% respectively.

Rupee depreciates 

 Meanwhile, in Forex markets, importer demand led to the USD/LKR rate on one week and one month forward contracts, depreciate further to close the day at Rs.150.30/40 and Rs.150.95/05 against its previous day’s closing levels of Rs.150.20/30 and Rs.150.80/95.

The total USD/LKR traded volume for 5 January was $ 26.14 million.

Some of the forward USD/LKR rates that prevailed in the market were: three months – 152.60/80 and six months – 154.70/80.