Standing Lending Facility Rate accessed for first time in 3 months

Secondary market bond yields dip ahead of weekly 

bill auction

By Wealth Trust Securities

The Standing Lending Facility Rate (SLFR) of 7.50% was accessed for the first time over three months yesterday for an amount of Rs. 1.87 billion as surplus liquidity decreased further to Rs. 41.85 billion. 

In line with this, overnight call money and repo rates increased further to average 6.19% and 6.04% respectively against its previous day’s averages of 6.17% and 6.03%. Meanwhile in secondary market bonds, yields dipped marginally ahead of today’s weekly Treasury bills auction.  At today’s auction, the total offered amount will reduce to Rs. 16 billion in comparison to its previous week’s total offered amount of Rs. 20 billion with Rs. 6 billion on offer on the 182 day maturity, Rs. 8 billion on the 364 day maturity and a further Rs. 2 billion on the 91 day maturity, being offered for the first time in three weeks once again.  At last week’s auction the weighted averages on both the 182 day and 364 day bills continued its upward trend to reflect increase of seven and nine basis points respectively to 6.57% and 6.63%.

Buying interest saw the liquid maturities of 1 May 2020, 1 August 2021, 1 September 2023 and 1 August 2025 hitting intraday lows of 8.36%, 8.77%, 9.17% and 9.45% respectively against its previous day’s closing levels of 8.39/42, 8.87/92, 9.26/32 and 9.56/62 while profit taking and selling interest at the intraday low levels curtailed the downward movement.  In addition, the three year maturity of 1 June 2018 was seen quoted at levels of 7.72/78 while the seven year maturity of 1 October 2022 at 9.00/10. However, continued selling interest in secondary market bills saw October 2015 and February 2016 maturities been offered at levels of 6.30% and 6.65% respectively.

Rupee remains steady

The rupee on spot contracts remained stable for a second consecutive day at Rs. 134 yesterday. The total USD/LKR traded volume for 17 August was $ 4.50 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month – 134.64/74; three months – 135.84/94 and six months – 137.74/84.