Secondary market bond yields ease ahead of weekly Treasury bill auction

By Wealth Trust Securities

Secondary market bond yields eased marginally yesterday as activity picked up ahead of today’s weekly Treasury bill auction.

At today’s auction a total amount of Rs 13 Bn is on offer; lower than last week’s total amount of Rs 15 Bn. At last week’s auction, the weighted average (WAvg) on the 91 day dipped by 2 basis points to 8.73%, while WAvg’s on the 182 day and 364 day bills remained unchanged at 9.90% and 10.86% respectively. Once again secondary market activity mainly surrounded the two liquid five year maturities (i.e.01.04.2018 and 15.08.2018) yesterday as it dipped to intraday lows of 11.08% and 11.14% respectively before closing the day at levels of 11.09/10 and 11.15/18. Furthermore activity on the longer leg of the curve was witnessed as well, with the eight year maturity changing hands within the range of 11.52% to 11.54%. Surplus liquidity in money market increased further to Rs. 21.26 billion yesterday, which intern helped overnight call money and repo rates remain steady to average 8.77% and 8.38% respectively. Central Bank continued to refrain from conducting any Open Market Operations (OMO).

Rupee closes the day marginally higher

In Forex markets, the USD/LKR rate closed the day marginally higher yesterday at Rs 126.47/49 against its opening levels of Rs 126.50/55. The total USD/LKR volume for the previous day (03rd June) stood at US $ 33.30 million.  Given below are some forward dollar rates that prevailed in the market,  1 Month –127.28; 3 Months- 128.81 and 6 Months- 131.28