Weekly averages continue downward trend

• Mixed fortunes witnessed across the yield curve
• CBSL holding of Government Securities down to a 10-week low

By Wealth Trust Securities

The weighted averages at yesterday’s weekly Treasury bill auction dipped across the board for a fourth consecutive week as its total accepted amount was recorded at Rs. 25.5 billion against its total offered amount of Rs. 17 billion. 

Once again it was the 182-day bill which reflected the highest accepted amount of Rs. 16 billion or 62.65% of the total accepted amount as its weighted average dipped by 12 basis points to 6.87% closely followed by the 91 day and 364 day bills by 17 basis points and six basis points respectively to 6.44% and 7.00%.

In secondary market bonds, the yield curve witnessed mixed fortunes yesterday as yields on the belly end of the curve was seen increasing while yields on the long end of the curve continued to dip. Buying interest on the 15 May 2030, 15 March 2035 and the 1 March 2045 saw its yields dip to intraday lows of 9.50%, 9.95% and 10.50% respectively while selling interest towards the latter part of the day saw yields on the two 2019s (i.e. 1 July 2019 and 15 September 2019), the 1 May 2020, the two 2021s (i.e. 1 May 2021 and 1 August 2021), the 1 October 2022 and the 1 September 2023 maturities increase to daily highs of 8.42% each, 8.58%, 8.76% each, 8.93% and 8.92% respectively against its opening lows of 8.35%, 8.45%, 8.65%, 8.88% and 8.92%.

In secondary market bills, the 364 day bill was seen changing hands within the range of 6.90% to 6.93% post auction while the 182 day bill was quoted at 6.65%/6.75%.

In money markets yesterday, overnight call money and repo rates remained mostly unchanged to average 6.32% and 6.10% respectively as surplus liquidity increased marginally to Rs.123.47 billion. Meanwhile, the Central Bank holding of Government securities (book value) was seen dipping to a ten week low of Rs.82.61 billion yesterday from its previous day’s holding of Rs.229.96 billion.

Rupee dips to a fresh low  

Meanwhile in Forex markets yesterday, continued seasonal importer demand saw the USD/LKR rate on spot contracts depreciate further to close the day at Rs.141.50/60 against its previous day’s closing of Rs. 141.08/15. The total USD/LKR traded volume for 2 November was $ 59.35 million. Some of the forward USD/LKR rates that prevailed in the market were: one month – 141.95/05; three months – 142.95/15; and six months – 145.00/20.