Money market liquidity increases to two month high
Tuesday, 2 July 2013 00:07
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Excess liquidity in money markets spiked to a two month high of Rs. 35.06 billion yesterday following the 200 basis points Statutory Reserve Requirement (SRR) cut for all commercial banks effective from yesterday.
Wealth Trust Securities said the slash in the SRR was expected to bring in around Rs. 58 billion into the system of which the balance has been mopped up by Central Bank through its Open Market Operations (OMO) and a sell down of its Treasury bill stock.
However overnight call money and repo rates continued to remain steady despite the surge in liquidity to average 8.73% and 8.17% respectively as Rs. 29.4 billion was mopped up on an overnight basis at a weighted average of 7.78%.
In secondary bond markets yields remained mostly steady as activity dried up yesterday. Active two-way quotes were mainly seen on the two liquid five-year maturities (i.e. 01.04.2018 & 15.08.18) with a limited amount of activity taking place at levels of 11.31% to 11.32% and 11.35% to 11.38% respectively. In addition the eight year maturity was seen been quoted at levels of 11.50/60 while the 364-day bill continued to drop in secondary markets to close the day at 10.55/62.
