Weekly auction continues to draw record low volumes

Secondary market bond yields continue to see saw

By Wealth Trust Securities

The weekly Treasury bill auction continued to draw record low accepted amounts as it’s weighted averages continued to edge up further, at its auctions conducted yesterday. 

The 182 day and 364 day maturities recorded increases of 06 and 05 basis points respectively to 9.71% and 10.25% while the 91 day remained steady at 8.60% for a fifth consecutive week. The total accepted amount was seen hovering around a 12-year low of Rs 2.98 billion against its total offered amount of Rs 31.5 billion. 

In secondary bond markets, yields were seen see sawing yesterday but closing lower than its previous days close. The liquid maturities of 01.10.22, 01.09.23, 01.08.24 and 01.08.26 were seen hitting intraday lows of 12.15%, 12.50%, 12.56% and 12.60% respectively against its previous day’s closing levels of 12.30/12.45, 12.65/80 and 12.75/80 each subsequent to hitting intraday highs of 12.25%, 12.60%, 12.75% and 12.80%. In addition, activity was witnessed on the 15.09.19 and 01.05.20 maturities at levels of 11.65% to 11.66% and 11.88% to 11.95% respectively while 2018 maturities continued to change hands within the range of 11.45% to 11.55%.

In money markets, the overnight call money and repo rates remained steady to average at 8.44% and 8.63% respectively as the net deficit in the market decreased further to Rs.32.76 billion yesterday. 

The Open Market Operations (OMO) department of Central Bank injected an amount of Rs.5.00 billion on an overnight basis by way of a Reverse Repo auction at a W.Avg of 8.50% while it injected a further amount of Rs.0.65 billion by way of outright purchase of Treasury bill at a weighted average rate of 9.07% for 78 days, valued today. 

 Rupee appreciates marginally

 Meanwhile in Forex markets yesterday, the USD/LKR rate on spot next contracts appreciated once again to close the day at Rs.148.45/55 against its previous day’s closing level of Rs.148.70/75. The total USD/LKR traded volume for 22 November was $ 34.00 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month – 149.25/35; three months – 151.20/30; and six months – 153.80/90.