Secondary market Treasury bills yields continue to rise

By Wealth Trust Securities

The increasing trend of bond yields experienced in the secondary market subsequent to the release of the Treasury bill auction results continued, with intraday high yields of 10.95% and 10.90% on the more liquid five year maturities (i.e. 1.4.2018 and 15.8.2018).

In the meantime, two way quotes were witnessed on the longer tenure of the yield curve as well, with the eight year bond quoted at 11.45/55%, and the nine year bond at 11.70/90%. The Treasury bill secondary market too was active with moderate selling pressure.

Meanwhile, the surplus overnight liquidity witnessed in the money markets continued to remain high at Rs. 28.78 billion with an amount of Rs. 25.3 billion being drained by way of an overnight Repo auction conducted by the Open Market Operations (OMO), at a WAvg of 8.35%.

This in turn helped call money and repo rates to remain steady at an average of 9.59% and 8.75% respectively. Furthermore, in an attempt mop up longer term liquidity, an amount of Rs. 5 billion was absorbed through an outright sale of bills, with a maturity of 14 days at a WAvg of 8.62%.

Rupee remains stable

In the Forex market, the rupee remained stable at levels of Rs. 125.90 – Rs.126.10 as volumes traded were rather moderate. The total USD/LKR traded volume for the previous day (6.2.13) stood at US $ 78.10 million.