Treasury Bill Weighted Average ends 2012 at eighth month low

Central Bank’s borrowing costs tumbled for a third consecutive week at its weekly Treasury bill auction held yesterday.

The 364 day bill dipped the most by a staggering 49 basis points (bp) to 11.69%, a level last seen in April 2012 according to Wealth Trust Securities.

It said an amount of Rs. 9.2 billion was accepted on this maturity against its initial offered amount of Rs.8 billion, signalling continued market appetite for this maturity and Central bank’s preference to accept more on the longer tenure duration as it represented 55% of the total accepted amount as well. An additional Rs 1.5 billion was accepted at the auction against its total offered amount of Rs 15 billion as the 91 day and 182 day bills dipped by 23 bp and 21 bp respectively to 10.00% and 11.32%.

Wealth Trust also said despite the reduction in weighted averages at the weekly Treasury bill auction, the secondary bond market remained rather inactive yesterday ahead of the holiday week. Yields remained mostly unchanged as a limited amount of activity was witnessed on secondary market bills, mainly on the 182 day and 364 day bills at levels of 11.10% - 11.15% and 12.55% - 12.60% respectively.

Central bank refrained from conducting any Open market Operations (OMO) for a second consecutive day as market liquidity reversed back to a surplus of Rs 9.48 billion yesterday.



This led overnight call money and repo rates remaining unchanged to average 9.84% and 9.00% respectively.