Secondary market bond yields steady ahead of weekly Treasury bill auction
By Wealth Trust Securities
The overall activity in secondary bond markets remained moderate yesterday as limited buying interest curtailed further upward pressure on yields ahead of today’s weekly Treasury bill auction. A limited amount of activity was witnessed on the 1 July 2019 and 1 July 2022 maturities within the range of 7.68% to 7.80% and 8.45% to 8.50% respectively. 
Meanwhile, today’s auction will have on offer Rs. 1 billion on the 91 day, Rs. 2 billion on the 182 day and Rs. 9 billion on the 364 day maturities. At last week’s auction, weighted averages decreased by two basis points and one basis point respectively on the 182 day and 364 day maturities to 6.28% and 6.30% while all bids were rejected for the 91 day maturity. In secondary bill markets, October 2014 and July 2015 bills were offered at levels of 6.35% and 6.45% respectively.
Meanwhile in money markets, overnight call money and repo rates remained steady to average 6.70% and 6.52% respectively as overall surplus liquidity stood at Rs. 39.11 billion yesterday. The total amount was deposited at Central Bank’s Standing Deposit Facility Rate (SDFR) of 6.50% as no auctions under its Open Market Operations (OMO) were conducted for a second consecutive day.
Rupee continues to dip marginally
Continued importer demand outpacing export conversions saw the USD/LKR rate dip for a second consecutive day to close at Rs 130.20/23 yesterday against its previous day’s closing of Rs. 130.20/22. The total USD/LKR traded volumes for 25 August stood at $ 56.20 million. Given are some forward dollar rates that prevailed in the market: one month – 130.64; three months – 131.32; six months – 132.32.
