Upward trend continues at weekly bill auction

By Wealth Trust Securities

The upward trend in weighted averages at the weekly Treasury bill auctions continued for a third consecutive week yesterday.

The 91 day maturity increased the most by nine basis points to 8.80% closely followed by the 182 day and 364 day maturities by eight and four basis points respectively to 9.75% and 10.52%. A total amount of Rs.24.47 billion was accepted at the auction against its total offered amount of Rs.31 billion. 

Reversing an upward trend witnessed over the past three days, secondary market bond yields decreased yesterday mainly on the belly end of the yield curve on the back of fresh buying interest. 

The liquid maturities of 15.10.21, 01.01.24 and 01.06.26 were seen hitting lows of 12.08%, 12.40% and 12.52% respectively against its previous day’s closing levels of 12.15/18, 12.50/54 and 12.60/64. In addition the 2018 maturities of 15.10.18 and 15.11.18 were seen changing hands within the range of 11.45% to 11.50% while the 01.05.20 maturity changed hands at levels of 11.75% to 11.78% as well. 

Meanwhile in money markets, the injection of liquidity for the first time in 18 days by way of a reverse repo auction amounting to Rs.5 billion at a weighted average rate of 7.98% by the Open Market Operations (OMO) department of Central Bank saw the weighted averages on overnight call money and repo rates remaining at 8.15% and 8.02% respectively yesterday. 

The liquidity in the system stood at a net deficit of Rs.1.03 billion with a further amount of Rs.26.32 billion being accessed from the Standard Lending facility rate of 8.00% (SLFR) against a deposit amount of Rs.32.36 Billion at its Standing Deposit Facility Rate (SDFR) of 6.50%.

Rupee dips again

The rupee rate on the active spot next contract was seen depreciating once gain to close the day at Rs.148.20/35 against its previous day’s closing levels of Rs.148.00/20 on the back of importer demand. The total USD/LKR traded volume for 31 May was $ 91.80 million. 

Given are some forward USD/LKR rates that prevailed in the market: one month – 148.95/20; three months – 150.70/00; and six months – 153.00/20.