Weekly averages decrease for a second consecutive week

Bond yields resume downward trend

By Wealth Trust Securities

The positive momentum in primary market rates continued at yesterday’s weekly Treasury bill auction for a second consecutive week as the degree of decrease was seen increasing as well. 

The 364 day bill recorded the sharpest decline of 19 basis points to 10.83% followed by the 182 day bill by 17 basis points to 10.53%. Interestingly, the total offered amount of Rs. 33 billion was fully met to record a 52-week high on its total accepted amount. 

In the secondary bond market yesterday, yields were seen decreasing once again reversing an upward trend witnessed over the previous two trading days. Activity centered heavily on the 01.08.2024 and the 01.08.2026 maturities with its yields dipping to daily lows of 11.83% and 11.90% respectively against its days opening highs of 12.10% and 12.20%. In addition, on the short end of the yield curve, the 01.03.21 and 15.12.21 maturities were seen changing hands within the range of 11.60% to 11.75% as well.

The total secondary market Treasury bond transacted volume for 2 May 2017 was Rs. 8.95 billion.

In money markets, the overnight call money and repo rates averaged 8.74% and 8.72% respectively as the Open Market Operations Department of the Central Bank of Sri Lanka continued to inject an amount of Rs. 14.00 billion on an overnight basis by way of a Reverse Repo auction at a weighted average of 8.75%. The net liquidity shortage increased to Rs. 11.79 billion.

Rupee dips further   

 The USD/LKR rate on spot next and three-week forward contracts depreciated further yesterday to close the day at levels of Rs. 153.00/10 and Rs. 153.55/70 respectively against its previous day’s closing levels of Rs. 152.90/93 and Rs.153.55/60 on the back of importer demand. The spot reference rate was lowered to Rs.152.10 yesterday.

The total USD/LKR traded volume for 2 May 2017 was $ 21.70 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 153.85/95; three months - 156.00/10 and six months - 159.00/10.