Bond market stagnant as policy rates unchanged; liquidity returns to a surplus

The secondary bond market was stagnant yesterday as the upward pressure on yields appeared to be taking a breather ahead of the weekly Treasury bill auction to be held today, Wealth Trust Securities said.

It said a limited amount of activity was witnessed on the five year and seven year maturities with overall activity remaining rather dull.

The Public Debt Department of CBSL announced in total an amount of Rs 10 billion to be auctioned today with Rs 2 billion, 3 billion and 5 billion been offered on the 91, 182 and 364 day bills respectively. At last week’s auction, weighted averages increased by 3, 6 and 8 basis points respectively on these maturities to levels of 10.66%, 11.83% and 12.37%.

Wealth Trust also said in the secondary bill market, selling pressure was evident with the 91 day and 182 day bills been offered at levels of 10.80% and 11.90% while the 364 day bill was offered at 12.50%.

Overnight call money and repo rates remained steady yesterday to average 10.51% and 9.67% respectively as money market liquidity returned to a net surplus of Rs 1.15 billion subsequent to the term reverse repo auction as Central Bank refrained from conducting any overnight OMO auctions as well.

Rupee trades above Rs 130 during intraday trades (subhead)

The rupee was seen trading at a 19 day low of Rs 130.05 yesterday on the back of continued importer demand against its opening levels of Rs 129.77. However selling at these levels saw the greenback close the day marginally higher at a quote of Rs 129.95/130.05. Given below are some forward dollar rates that prevailed in the market, 1 Month - 130.55; 3 Months - 132.82 and 6 Months -135.90.