Treasury bond yields decrease marginally ahead of weekly bill auction

By Wealth Trust Securities

Treasury bond yields declined marginally ahead of today’s weekly Treasury bill auction,  with investors looking to pick maturities of 15.01.2019, 15.12.2021 and 01.08.2024 leading to their yields hitting daily lows of 11.05%, 11.47% and 11.65% when compared against the previous day’s closing levels of 11.05/07, 11.47/52 and 11.65/70. 

Furthermore, the liquid maturities of 01.07.19 and the two 2023 (i.e. 15.05.23 and 01.09.23) were seen trading at levels of 11.20% to 11.21% and 11.65% respectively. However, selling interest at these levels saw yields close the day steady without decreasing further.

Today’s bill auction will have on offer Rs. 5 billion of the 91-day, Rs. 13 billion of the 182-day and Rs. 8 billion of the 364-day maturities. This is in comparison to last week’s total offered amount of Rs. 29.5 billion, where the weighted averages reflected a downward trend for a fourth consecutive week. The 91-day, 182-day and 364-day maturities recorded weighted averages of 9.62%, 10.42% and 10.73% respectively. Meanwhile, in the secondary bill market, November 2017 bills continued to change hands at levels of 10.35%.

In money markets, the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka drained out an amount of Rs. 20 billion on an overnight basis at a weighted average of 7.27% by way of a repo auction as the net surplus liquidity in the system stood at Rs. 19.01 billion. Overnight call money and repo rates remained mostly unchanged to average 8.75% and 8.77% respectively. 

Rupee remains mostly unchanged  

In Forex markets, the USD/LKR rate on the active spot next contract remained mostly unchanged to close the day at Rs. 152.80/90. 

The total USD/LKR traded volume for 22 May 2017 was $ 32.05 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month - 153.95/05; three months - 155.85/95 and six months - 158.80/90.