Secondary market yields seesaw during the week

By Wealth Trust Securities

Activity in secondary bond markets remained very high during the week as yields seesawed mainly on the two liquid five year maturities from a weekly low of 11.20% to a high of 11.42% ahead of this month’s monetary policy announcement due on 9 April.

During the week, the weighted averages at the weekly Treasury bill auction remained steady for the first time in five weeks which in turn saw the five year maturity change hands within the range of 11.20% to 11.28% during the first half of the week.

However, selling interest from this point onwards saw an upward shift on the yield curve with the five year maturity hitting a weekly high of 11.42% and closing the week at 11.37/40. Furthermore, activity on secondary market bills remained throughout the week, mainly on the 364-day bill at levels of 11.30% to 11.35%.

Meanwhile in money market, surplus liquidity increased towards the latter part of the week to close the week at Rs. 48.55 billion as overnight call money and repo rates remained steady to average 9.44% and 8.58% for the week. Furthermore, the Open Market Operations (OMO) department of Central Bank was seen mopping up liquidity on a daily basis at a weighted average of 8.35%.

Rupee appreciates to Rs. 125.55

The rupee appreciated during the week against its last week’s closing levels of Rs. 126.82 on the back of exporter conversions ahead of the New Year season.

The total USD/LKR traded volume for the first four days of the week stood at US$ 61.64 million. Following are some forward dollar rates that prevailed in the market: One month – Rs. 126.69, three months – Rs. 128.64 and six months – Rs. 131.62.

Given are the closing, secondary market yields for the most frequently traded maturities: