Weekly weighted averages increase following policy hike

Thursday, 4 August 2016 00:28 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The weighted averages at yesterday’s weekly Treasury bill auction increased as expected across all three maturities following last week’s monitory policy hike.

The weighted averages on the 182-day and 364-day maturities were seen increasing by 21 and 25 basis points respectively to 9.90% and 10.73% while the weighted average on the 91-day increased by 19 basis points to 8.99%.

The total accepted amount was seen falling short of the total offered amount for the first time in three weeks, as the 182-day and 364-day maturities combined to represent 92% of the total accepted amount.

The secondary bond market remained active yesterday as yields were seen edging up during morning hours of trading, mainly on the maturities of 01.03.21, 01.08.24 and the two 2026s maturities (i.e. 01.06.26 and 01.08.26) to intraday highs of 12.00%, 12.45%, 12.60% and 12.70% respectively.

However, buying interest at these levels, following the outcome of the weekly Treasury bill auction, saw yields dip once again to hit intraday lows of 11.96%, 12.37%, 12.58% and 12.65% respectively.

In secondary bill markets, June and July 2017 bills were seen changing hands within the range of 10.60% to 10.62% and 10.70% to 10.75% respectively pre-auction.

Meanwhile, in money markets, overnight call money and repo rates averaged at 8.40% and 8.55% respectively as the net liquidity shortfall in the system stood at Rs. 42.78 billion. The Open Market Operations (OMO) department of the Central Bank injected an amount of Rs. 40 billion on an overnight basis by way of a Reverse Repo auction at weighted averages of 8.29%.

Rupee remains mostly unchanged

Meanwhile in Forex markets, the rupee on the one week forward contract remained mostly unchanged to close the day at Rs. 146.00/10 yesterday. The total USD/LKR traded volume for 2 August 2016 was $ 47.25 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 146.85/00; three months - 148.40/60 and six months - 150.80/00.