Money market liquidity increases once again

Market Activity Report by Wealth Trust Securities

The week started with a positive sentiment in terms of liquidity in the system as the surplus in money markets was at Rs. 2.86 b yesterday in comparison to its previous week’s closing net deficit of Rs. 0.66 b.

The Central Bank conducted a Repo auction through its Open Market Operations (OMO) for the first time in five days in order to drain excess liquidity from the system.

An amount of Rs. 2.69 b was accepted at this auction at a weighted average of 9.42% out of an offered amount of Rs. 6 b. Overnight call money and repo rates remained steady yesterday, to average 10.59% and 9.62% respectively.

Activity in secondary bill and bond markets remained lacklustre yesterday, with yields remaining mostly unchanged. Given below are the closing, secondary market yields for the most frequently traded maturities:

Meanwhile, in Forex markets the USD/LKR rate appreciated marginally by eight cents yesterday to Rs. 132.27 against its previous week’s closing level of Rs. 132.35.

However, morning trades saw the rupee dip to an intraday low of Rs. 132.40 on the back of demand for contracts value tomorrow (11 September). Given below are some forward dollar rates that prevailed in the market: one month – 133.57; three months – 136.14; and six months – 139.99.