Bond yields increase ahead of weekly bill auction

By Wealth Trust Securities

The selling interest in the secondary bond market was seen spilling over to the long end of the yield curve yesterday following the short end over the previous two trading days. 

The yields on the 01.01.24, 15.03.25, 01.06.26 and 15.05.30 maturities were seen increasing to daily highs of 12.15% each, 12.29%, and 12.62% respectively against its days opening lows of 12.05%, 12.10%, 12.20% and 12.55% on the back of considerable volumes changing hands. 

Meanwhile, the Central Bank of Sri Lanka was seen keeping its policy rates unchanged at 6.50% and 8.00% for a second consecutive month at its meeting held yesterday for the month of April.

This was ahead of today’s weekly Treasury bill auction, where a total amount of Rs. 24 billion will be on offer consisting of Rs. 8.5 billion each on the 91 day and 182 day bills and a further Rs. 7 billion on the 364 day bill. At last week’s auction, the weighted average on the 364 day bill was seen increasing by seven basis points to 10.17% while the 182 day dipped by one basis point to 9.53% and the 91 day remained unchanged at 8.45%. 

Meanwhile in money markets, the net deficit was seen increasing to Rs. 1.14 billion yesterday as call money and repo rates remained steady to average 8.15% and 8.03% respectively.

 Rupee remains broadly steady

The USD/LKR rate on the active spot next contract was seen closing the day broadly steady at Rs. 146.50/70 yesterday.  The total USD/LKR traded volume for 25 April was $ 65.80 million. 

Some of the forward USD/LKR rates that prevailed in the market were: one month – 147.40/70; three months – 149.25/65; and six months – 151.70/20.