Downward trend in bond yields continues ahead of weekly bill auction
By Wealth Trust Securities
The yields in secondary bond markets dipped further yesterday ahead of this week’s Treasury bill auction.
Buying interest mainly fuelled by the second quarter GDP growth number of 7.8% was witnessed across the yield curve from the three year maturity of 15 May 2017, the two four year maturities (1 April 2018 and 15 August 2018), the five year maturity of 1 July 2019 and the eight year maturity of 1 July 2022 as its yields were seen hitting intraday lows of 6.85%, 7.13%, 7.20%, 7.40% and 8.07% respectively against its days opening highs of 6.95%, 7.17%, 7.25%, 7.45% and 8.15%.
Furthermore buying interest on secondary market Treasury bills saw October 2014 bills quoted within the range of 6.17% to 6.22% and July 2015 bills within 6.25% to 6.30%. Today’s bill auction will have on offer a total amount of Rs. 5 billion with Rs. 0.5 b on the 91 day maturity, Rs. 1.5 b on the 182 day maturity and Rs. 3 b on the 364 day maturity. At last week’s auction, weighted averages dipped by one basis point each on the 91 day, 182 day and 364 day maturities to 6.18%, 6.27% and 6.29% respectively.
Meanwhile in money markets, overnight call money and repo rates remained steady to average 6.70% and 6.51% respectively as surplus liquidity in the market stood at Rs. 26.69 billion yesterday. The full 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 remains steady
In Forex markets, the USD/LKR rate on spot contracts remained steady to close the day at levels of Rs. 130.28/30 as markets continued to be at equilibrium. The total USD/LKR traded volume for 15 September was at $ 40.15 million.
Some of the forward dollar rates that prevailed in the market were: one month – 130.83; three months – 131.49; and six months – 132.59.
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