Shorter tenure yields dip marginally ahead of weekly Treasury bill auction
Wednesday, 19 February 2014 00:36
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By Wealth Trust Securities
Yields on the shorter tenure bond maturities dipped marginally ahead of this week’s Treasury bill auction.
Buying interest was witnessed of durations close to two years (i.e. 15 July 2015) and three years (i.e. 1 April 2016 and 1 August 2016) with yields hitting intra-day lows of 7.20%, 7.45% and 7.70%, against opening levels of 7.15/25, 7.55/65 and 7.75/80. However, this trend was not witnessed in the liquid 2018 maturities (i.e. 1 April 2018 and 15 August 2018) as they closed the day mostly unchanged with moderate trades taking place.
This week’s Treasury bill auction will have on offer a total amount Rs. 10 billion with Rs. 3 b each of the 91 day and 182 day maturities and Rs. 4 b of the 364 day maturity.
The weighted averages (WAvgs) of the 91 day and 182 day bill maturities decreased by five basis points and eight bp last week to 6.77% and 6.92%, while the WAvg on the 364 day bill remained steady at 7.10%. In the secondary bill market, October 2014 bills changed hands within a range of 6.85% to 6.90%, while the 364 day bill was quoted at 7.00/10.
Following the continuous mopping up of excess liquidity through Open Market Operations (OMO), surplus liquidity dipped to a low of Rs. 13.06 b. However, overnight call money and repo rates remained steady to average 6.97% and 6.35% respectively.
Rupee remains steady
In Forex markets, the USD/LKR rate on spot contracts remained steady to close the day at levels of Rs.130.82/85. The total USD/LKR traded volume for the previous day (17 February 2014) stood at US$ 51.85 million.
Given are some forward dollar rates that prevailed in the market: one month – 131.30; three months – 132.26; and six months – 133.76.
