Surplus liquidity drained out further through term auctions

Thursday, 13 February 2014 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The Open Market Operations (OMO) department of the Central Bank mopped up Rs. 22.40 billion from the system through three term repo auctions at yields of 6.68% for 29 days, 6.78% for 63 days and 6.80% for 78 days. Interestingly these yields reflected a considerable increase in

rates when compared against market expectations. In the meantime the mostly unchanged surplus liquidity of Rs. 10.52 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) at 6.50%. The overnight call money and repo rates increased marginally to average 7.00% and 6.50% respectively. In secondary bonds markets, the downward movement in secondary bond yields continued with the 2018 maturities (i.e. 1 April 2018 and 15 August 2018) being the most active, with opening yields of 9.05/15 and 9.10/20 respectively before dipping to levels of 8.98/02 and 9.05/12 towards the latter part of the day. Furthermore, maturities such as the 15 July 2017 and 1 May 2021 were seen trading within the range of 8.75% to 8.85% and 9.60% to 9.75% respectively. On the contrary, secondary market bills were quoted at 6.80/90 on the 182 day maturity and 7.05/15 on the 364 day with overall activity remaining dull. Rupee remains steady In Forex markets, the USD/LKR rate remained steady to close the day at Rs. 130.80/130.85. The total USD/LKR traded volume for the previous day (11 February 2014) stood at US$ 75.13 million. Some of the forward dollar rates that prevailed in the market were one month – 131.38; three months – 132.38; and six months – 133.73.