Bond markets subdued ahead of monetary policy announcement

The secondary bond market was rather quiet at the start of the week as market participants awaited the outcome of the monetary policy announcement to be made today, debt market specialist Wealth Securities said.

“It is widely expected to remain unchanged for the fourth consecutive month,” it added.

Wealth Trust said thin volumes were seen traded on the four-year maturity yesterday, with its yield seen closing higher of 14.22%-14.25%, in comparison to Friday’s closing yields.

In money markets, overnight call money and repo rates edged up marginally by around five basis points to levels of 10.45% - 10.55% and 9.45% - 9.60% respectively, as the Central Bank mopped up an amount of Rs. 15.7 billion from the system on an overnight basis at a weighted average of 9.42%, which coincidently is the same rate for the fifth consecutive day.

“Additionally the bank conducted two short-term auctions for the outright sale of Treasury bills in an effort to mop up liquidity further,” Wealth Trust said. “Furthermore the rupee remained mostly unchanged at levels of Rs. 131.85/131.90 in thin volumes being transacted,” it added.