The secondary Bond market yesterday saw yields consolidate locking in the gains from the recent rally and edge lower on selected tenors. Initially some selling pressure was observed which was quickly absorbed and contained by renewed buying interest. Activity and transaction volumes were seen at healthy levels.
The 15.12.29 maturity traded at the rate of 10.80%. The 01.08.30 and 15.10.30 maturities traded at the rates of 11.10%-11.05% and 11.10% respectively. The 01.02.31 and 01.12.31 traded at the rates of 11.10% and 11.17% respectively. The 01.11.33 traded within the range of 11.80%-11.75%. The 15.10.34 traded within the range of 11.95%-11.93%. The 15.08.36 rallied further and saw it trading down the range of 12.20%-12.10%.
At the weekly Treasury Bill auction conducted yesterday, weighted average yields were seen holding broadly steady for the sixth straight week. The yield on the 182-day tenor posted a decline of one basis point- the first such decline on any tenor observed at the auction in nine weeks. The yield on the 91-day and 364-day tenors were seen remaining unchanged week on week at the rates of 9.35% and 9.95% respectively.
The Public Debt Management Office (PDMO) raised only Rs. 79.06 billion or 87.85% (up from 73.22% observed the previous week) in total out of the Rs. 90 billion offered in total. The 91-day tenor recorded acceptance above its respective target allocation, while the 182-day and 364-day recorded acceptances below their respective offered amounts. Total bids received amounted to 1.86 times the overall offer.
The Phase II subscription only on the 182-day and 364-day tenors is now open until 3:00 p.m. today at the Weighted Average Yield Rates (WAYRs) determined at the auction (see table for details of the auction).
In the money market, the net liquidity surplus stood at Rs. 154.07 billion yesterday. A total of Rs. 118.07 billion was deposited at the Central Bank’s SDFR (Standing Deposit Facility Rate) of 8.25%, while no funds were withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 9.25%. In addition, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka mopped out Rs. 36.00 billion by way of an overnight repo auction at a weighted average yield of 8.73%.
The weighted average yields on overnight call money and repos were recorded at 9.02% and 9.13% respectively.
Forex market
The USD/LKR rate on spot contracts or the rupee was seen closing yesterday at Rs. 332.37/332.40, broadly against its previous day’s level of Rs. 332.30/332.37. The total USD/LKR traded volume for 10 November amounted to $ 151.68 million.