Five-year bond yield dips marginally on thin volumes

By Wealth Trust Securities

Yields on the two liquid five-year maturities (15 August 2018 and 1 April 2018) dipped marginally yesterday on the back of thin volumes to close the day at levels of 11.37/39 from its opening level of 11.38/42. However overall activity continued to remain rather dull as yields on other maturities across the yield curve remained steady.

Continued buying interest on secondary market bills was witnessed as duration centring around the 91-day bill was seen changing hands at levels of 9.30% to 9.40% while the 364-day bill closed the day at 11.25/30.

Meanwhile the Public Debt Department (PDD) of the Central Bank announced two bond auctions to be conducted on Monday 29 April for durations of 8.8 years and 12 years respectively for an amount of Rs. 1 b each.

OMO department mops up liquidity on a term basis

In money markets, the Open Market Operations (OMO) department of Central Bank drained out an amount of Rs. 9 b in total on a term basis yesterday, with durations ranging from 14 days to 42 days by way of outright sales of Treasury bills.  

The 14-day and 35-day bills fetched weighted averages (WAvg) of 8.77% & 8.987% respectively, while the WAvg on the 42-day bill was 9.10%.

Surplus liquidity increased to Rs. 32.14 b yesterday as overnight call money and repo rates remained steady once again to average 9.46% and 8.59% respectively.

Rupee dips marginally

The dollar rupee rate dipped marginally by five cents yesterday to close the day at Rs. 126.85/90 due to import demand. The total USD/LKR volume for the previous day (23 April) stood at US$ 77.05 million. Given are some forward dollar rates that prevailed in the market: one month – 127.95; three months – 129.95; six months – 132.90.