Secondary market Treasury bond yields edged up marginally

The secondary bond market took a breather from three straight weeks of yields declining as selling pressure coupled with profit taking saw its yields close up marginally yesterday.

Once again it was the three and five year maturities which reflected the most amount of activity as its yields edged up in early hours of trading to intraday highs of 11.95% and 12.10% respectively and dipped once again to lows of 11.80% and 11.90%.

Furthermore the six year maturity increased to an intraday day high of 12.15% while the 1¼ year maturity saw activity take place within the range of 11.75% to 11.90%. However yields on all maturities closed marginally higher in comparison to Fridays closing levels.

See table for the closing, secondary market yields for the most frequently traded maturities.

Money market liquidity in the balance after a lapse of six days

Liquidity in money markets was at a balance after a lapse of six days as the Central Bank refrained from conducting any Open Market Operation (OMO) auctions yesterday. An amount of Rs. 6.862 b was deposited at Central Bank’s repo window rate of 7.75% and Rs. 6.856 b was accessed from its reverse repo window rate of 9.75%, bringing market to a near equilibrium. Overnight call money and repo rates remain steady to average 10.52% and 9.64% respectively.

In Forex markets the USD/LKR rate closed the day reflecting an appreciated of around 25 cents at Rs. 128.30 yesterday against its previous day’s closing level of Rs. 128.55. Morning trades saw the rupee gain to an intraday high of Rs. 128.15 while the total dollar/rupee volume for the previous day (5 October 2012) was at US$ 71.88 million.

Given below are some forward dollar rates that prevailed in the market, one-month – 129.65; three-months – 131.85; and six months – 134.73.

(Courtesy Wealth Trust Securities)