Bond yields continue to rise ahead of monetary policy announcement
Tuesday, 24 February 2015 00:38
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Secondary market yields edge up to one month highs
By Wealth Trust Securities
The upward trend in secondary market Treasury bond yields continued yesterday as well with yields seen hitting one month highs ahead of Central Banks monitory policy announcement for the month of February due today.
Activity continued to surround the two 2018 maturities (1 April 2018 and 15 August 2018) and the 01.07.2022 maturity as its yields were seen hitting one month high levels of 7.45%, 7.52% and 8.09% respectively against its previous trading day’s closing levels of 7.31/34, 7.40/45 and 7.92/96 as volumes traded increased.
In addition, the 1 July 2019 maturity was seen changing hands at a high of 7.62% as well. Meanwhile, selling pressure on secondary market bills saw November 2015 durations been offered at 6.25%.
In money markets, overnight call money and repo rates remained mostly unchanged to average 6.00% and 5.62% respectively as surplus liquidity in the system on an overnight basis stood at Rs. 19.24 billion. The Open Market Operations (OMO) department of Central Bank drained out an amount of Rs. 10 billion on an overnight basis at a weighted average rate of 5.91%.
Rupee loses ground
The removal of the limitation on forward premiums to two cents per day saw the quote on one week forward contracts depreciate to Rs 133.40/50 yesterday. However, quotes on spot and spot next contracts remained at Rs 132.90/20 and Rs 132.92/20 respectively as activity continued to remain very dull. The total USD/LKR traded volume for 20 February was at $ 47.80 million.
Some of the forward USD/LKR rates that prevailed in the market were: one month – 133.65; three months – 134.90; and six months – 136.30.
