Money market liquidity in the negative first time in six weeks

The Central Bank through its Open Market Operations (OMO) infused an amount of Rs 7 Billion into the system by way of a Reverse Repo auction at a weighted average of 9.62%, held for the first time in 6 weeks as liquidity in the market was at a net deficit of Rs 7.7 Billion yesterday, Wealth Trust Securities said.

In addition a further amount of Rs 1.2 Billion was borrowed by market participants at Central Bank’s standing facility rate of 9.75%. This is the first instance liquidity is at a negative figure since the part conversion of US $ 400 million on the 25th of July 2012 from the US $ 1 Billion sovereign bond issue. However call money and repo rates remained steady to average 10.55% and 9.48% respectively, debt market specialist Wealth Trust said.

In line with this secondary market treasury bond yields increased marginally yesterday with the 18 ½ month bond and the 3 year bond reflecting the most amount of activity as its yields increased by 5 basis points each to intraday highs of 13.80% and 13.93% respectively. Furthermore selling pressure was evident on secondary market Treasury bills as well.

Given below are the closing, secondary market yields for the most frequently traded maturities,

In Forex markets Wealth Trust said the USD/LKR rate remained steady at Rs 132.25 with moderate volumes changing hands. The total dollar/rupee volume for the 30th of August 2012 was at US $ 31.2 million. Given below are some forward dollar rates that prevailed in the market, 1 Month - 133.51; 3 Months- 135.91 and 6 Months- 139.36