Weekly averages continue to decline at slower pace

By Wealth Trust Securities

The weighted averages at the weekly Treasury bill auction conducted yesterday reflected a downward trend for a fourth consecutive week but at a slower pace in comparison to its previous three weeks. 

The 182 day bill dipped by one basis point week on week to 10.42% while the 91 day bill reflected a decline of 11 basis points to 9.62% against its previous weighted average of 9.73% recorded three weeks back.  

However, the weighted average on the 364 day remained unchanged at 10.73%. A total amount of Rs. 24.68 billion was accepted against its total offered amount of Rs. 29.5 billion with the 182 day bill representing 60.24% of this volume. 

In secondary bond markets, yields continued to increase with the liquid maturities of 15.12.21, 15.05.23, 01.08.24 and 01.08.26 hitting intraday highs of 11.48%, 11.65% each and 11.68% respectively against its previous day’s closing levels of 11.40/45, 11.50/60, 11.57/60 and 11.60/67. 

Furthermore, the 01.07.19, 01.03.21, 01.07.22 01.01.24 and 15.03.25 maturities were seen changing hands at levels of 11.25%, 11.45%, 11.50% to 11.52%, 11.60% to 11.65% and 11.70% respectively, while on the shorter end of the curve the 01.04.18 maturity traded at 10.63%. 

In secondary bill markets, the November 2017 and May 2018 maturities were seen changing hands within the range of 10.45% to 10.50% and 10.70% to 10.72% respectively, pre-auction.

The total secondary market Treasury bond transacted volume for 16 May 2017 was Rs. 9.02 billion.

In money markets, the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka drained out an amount of Rs. 10.00 billion on an overnight basis at a weighted average of 7.29% by way of a repo auction as the net surplus liquidity in the system stood at Rs. 5.53 billion. The overnight call money and repo rates averaged 8.75% and 8.76% respectively.

 Rupee continues to dip 

The USD/LKR rate on the active spot next contracts depreciated further yesterday to close the day at levels of Rs. 152.75/90 against the previous day’s closing levels of Rs. 152.70/75 on the back of continued importer demand.

The total USD/LKR traded volume for 16 May 2017 was $ 40.55 million.

 Some of the forward USD/LKR rates that prevailed in the market were one month - 153.80/90; three months - 155.75/00 and six months - 158.55/85.