Thursday, 7 November 2013 00:00
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By Wealth Trust Securities
The Treasury bill weighted averages declined for a seventh consecutive week at its weekly Treasury bill auction held yesterday. The 182 day bill WAvg decreased the most by six basis points (bp) to 8.94% while the 364 day bill reflected a decrease of 1 bp to 9.82%. Once again, all bids received for the 91 day bill was rejected for a third consecutive week.
The accepted amount on the 364 day bill continued to be double than its initial offered amount of Rs. 7 billion, which in turn helped Central Bank accept in total an amount of Rs. 15.32 b at the auction against its initial total offered amount of Rs. 8 b.
Subsequent to the release of the auction results, the decreasing trend in secondary market bond yields witnessed during morning hours of trading came to a halt but yields still closed the day lower in comparison to its previous day’s closing levels.
Activity centred the 1 April 2016, 1 January 2017 and the liquid two five year maturities (i.e. 1 April 2018 and 15 August 2018) within the range of 10.37% to 10.42%, 10.73% to 10.80%, 10.99% to 11.01% and 11.07% to 11.09% respectively.
In secondary market bills the 364 day bill was seen changing hands within the range of 9.78% to 9.82% while May 2014 was traded within 8.95% to 9.02%.
Overnight surplus liquidity dipped to Rs. 4.7 billion (b) yesterday as the Open Market Operations (OMO) department of Central Bank refrained from conducting any term repo auctions for the first time in 26 days in order to mop up excess liquidity. However, overnight call money and repo rates remained steady to average 7.77% and 7.08% respectively.
Rupee remains steady
In Forex markets the USD/LKR rate remained steady for a second consecutive day to close the day at levels of Rs. 131.10/13 on the back of market equilibrium. The total USD/LKR traded volume for the previous day (5 November 2013) stood at US$ 52.90 million.
Some of the forward dollar rates that prevailed in the market were: one month – 131.88; three months – 133.52; and six months – 135.62.
