Rupee slips towards Rs. 127 for first time during the month

By Wealth Trust Securities

The rupee dipped by a further 25 cents yesterday to a three week  low of Rs. 126.97 on the back of continued importer demand amid thin volumes changing hands, subsequent to opening the day at levels of Rs. 126.75.

The total USD/LKR traded volume for the previous day (15 February 2013) stood at US$ 50.36 million. Given below are some forward dollar rates that prevailed in the market: one month – 127.73; three months – 129.48; and six months – 132.23.

Activity dries up in secondary bond markets as yields edge up once again

The upward momentum in secondary market Treasury bond yields was witnessed yesterday as well with the liquid two five-year maturities (i.e. 15 August 2018 and 1 April 2018) edging up to an intraday high of 10.94%.

Furthermore selling interest on durations of two years to four years saw its yields increase as well, reflecting a parallel shift upwards on the yield curve. In secondary market bills, the 364 day bill was seen changing hands at levels of 11.08% yesterday. Given are the closing, secondary market yields for the most frequently traded maturities.

Meanwhile, in money markets, efforts to drain out liquidity on a more permanent basis continued as a total amount of Rs. 5 b was mopped up from the system for tenures ranging from 17 days to 31 days by way of outright sales of Treasury bills.

A further amount of Rs. 30.40 b was mopped through an overnight auction at a weighted average of 8.34% as the surplus liquidity in the system remained high at Rs. 31.06 billion. This led to overnight call money and repo rates remaining steady to average 9.47% and 8.60% respectively.