Secondary markets stagnant ahead of weekly Treasury bill auction

By Wealth Trust Securities

Activity in secondary bond markets dried up yesterday ahead of today’s weekly Treasury bill auction. At today’s auction a total amount of Rs. 15 b is on offer with Rs. 1 b on the 91 day, Rs. 3 b on the 182 day and Rs. 11 b on the 364 day bills respectively.

At last week’s auction, weighted averages dived by 43 basis points (bp), 29 bp and 45 bp respectively following a 50 bp policy rate cut to 8.75%, 9.91% and 10.84%.

In secondary bond and bill markets, a very limited amount of activity was witnessed yesterday with the five year maturity changing hands at levels of 11.01% to 11.02% and the eight year at levels 11.50%. In addition, the 364 day bill was seen been traded at levels of 10.80% once again.

In money markets, liquidity returned to a surplus of Rs. 2.04 b yesterday as the Open Market Operations (OMO) department refrained from conducting any forms of auctions. Overnight call money and repo rates remained steady to average 9.00% and 8.35% respectively.

Rupee holds steady

The USD/LKR rate held steady yesterday at levels of Rs. 126.30 despite demand for contracts valued cash. The total USD/LKR volume for the previous day stood at US$ 46.50 million.