Secondary market bond yields edge up marginally ahead of weekly auction

Wednesday, 9 July 2014 00:22 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Profit taking across the yield curve saw secondary market bond yields edge up marginally yesterday, ahead of this week’s Treasury bill auction to be conducted today. Activity was witnessed from the three year duration of 15 May 2017 to the nine-and-a-half year duration of 1 January 2024 as its yields were seen hitting intraday highs of 7.45% on the 15 May 2017, 7.90% on the 1 April 2018, 8.00% on the 15 August 2018, 8.18% on the 1 July 2019, 8.90% on the 1 May 2021, 9.20% on the 1 July 2022 and 9.40% on the 1 January 2024 against its opening levels of 7.37/40, 7.85/90, 7.93/97, 8.07/10, 8.75/80, 9.04/08 and 9.32/35 respectively. However, considerable buying interest at these levels curtailed any further upward movement as volumes changing hands continued to remain high. Meanwhile, the monitory policy announcement for the month of July will be released on 14 July. Today’s auction will have a total amount of Rs. 10 billion on offer which will consist of Rs. 1 billion each on the 91-day and 182-day maturities and Rs. 8 billion on the 364-day maturity. At last week’s auction, the weighted average on the 364-day bill declined by 2 basis point to 6.97% while the weighted averages on the 91-day and 182-day bills declined by 1 basis point each to 6.50% and 6.68% respectively. In secondary bill markets, October 2014 bills were seen changing hands within the range of 6.55% to 6.60%, May 2014 within 6.75% to 6.80% and the 364-day bill was quoted at 6.90/95. In money markets, surplus liquidity was seen dipping once again to Rs. 18.1 billion yesterday against its previous days amount of Rs. 34.39 billion as the Central Bank refrained from conduction any Open Market Operations (OMO). However, overnight call money and repo rates remained steady to average 6.82% and 6.54% respectively. Rupee continues to remain steady Meanwhile in Forex markets, the USD/LKR rate was seen closing the day steady at Rs. 130.25/26 once again yesterday as markets continued to be at equilibrium and short dated forward premiums continued to dip. The total USD/LKR traded volumes for 7 July stood at $ 98.80 million. Some of the forward dollar rates that prevailed in the market were 1 Month: Rs. 130.48, 3 Months: Rs. 131.10 and 6 Months: Rs. 132.14.

Rupee tad firmer on dollar inflows; state banks curb volatility

REUTERS: The rupee ended firmer on Tuesday as inflows from remittances and exporter dollar sales outpaced demand for the US currency from importers while state banks lowered their dollar-buying rate by a cent. The rupee ended at Rs. 130.25/26 per dollar, a tad stronger from Monday’s close of Rs. 130.26/28. Dealer said state banks lowered the dollar-buying rate by one cent from the previous session to Rs. 130.25 per dollar. Purchases of dollars from two state banks helped curb volatility by mopping up liquidity and smoothening transactions, dealers said. “The rupee is firmer on inward remittances. We have seen some (dollar) selling in the evening,” said a currency dealer, asking not to be named. The Central Bank usually directs the market through the two state banks. But dealers said it was not quite sure if the state banks were buying for the Central Bank. Central Bank officials were not immediately available for comment.