T-Bill WAvgs increase as one-year hits two-month high

Weighted averages at yesterday’s weekly Treasury bill auction increased for a third consecutive week with the 364-day bill average moving up to levels last seen two months back.

The 91-day bill reflected an increase of six basis points (bp) to 9.22% and the 182-day bill by 10 bp to 10.25%, while the 364-day bill edged up by seven bp to 11.26%.

An amount of Rs. 6.4 billion was accepted in total against its total offered amount of Rs. 15 billion.

“This was the second consecutive week, at which the total accepted volume was below the total offered volume,” Wealth Trust Securities said.

It said in line with the outcome of the bill auction, yields on secondary market bonds increased as activity picked up.

Once again it was the two liquid five-year maturities (i.e. 1 April 2018 and 15 August 2018) which reflected the most amount of activity as its yields increased from a daily low of 11.38% to a high of 11.50%. However, buying interest at these levels saw its yields close the day at 11.44/50. In secondary market bills, the 364-day bill closed the day at 11.25/30, subsequent to changing hands at levels of 11.30% prior to the auction.

In money markets, surplus liquidity was at Rs. 16.88 b yesterday as an amount of Rs. 14.67 b was mopped up from the system on an overnight basis by way of a repo auction conducted by the Open Market Operations (OMO) department of the Central Bank at a WAvg of 8.35%. In line with this, overnight call money and repo rates continued to remain steady to average 9.45% and 8.55% respectively.

The rupee dipped by 20 cents yesterday to close the day at Rs. 126.77 on the back of demand for contracts value cash and tom. The total USD/LKR traded volume for the previous day (19 March 2013) stood at US$ 46.57 million. Some of the forward dollar rates that prevailed in the market were one month – 127.85; three months – 129.80; and six months – 132.80.