- Primary market rates continue to increase
- Secondary bond market activity remains moderates
- Money market liquidity reduce further; OMO continues to mop up
The shortened trading week ending 22nd October 2021 saw the weighted average yield on the market favorite 91 day bill continuing its increasing trend to hit an high of 8.39%, accumulating a total increase of 317 basis points over the past 12 weeks.
This intern kept activity in the secondary bond at a bare minimum during the week as only the maturities of 15.12.23, 01.12.24, 15.01.27 and 15.06.27 were seen changing hands at levels of 9.50%, 10.00% to 10.05%, 11.30% to 11.40% and 11.51% to 11.52% respectively.
The foreign holding in rupee bonds remained mostly unchanged at Rs.1.87 billion for the week ending 18 October 2021.
Nevertheless, the National Consumer Price Index (NCPI) for the month of September reflected a further decrease for a second consecutive month to 6.2% on its point to point in comparison to its previous month’s figure 6.7%.
The daily secondary market Treasury bond/bill transacted volumes for the first two trading days of the week averaged Rs.23.36 billion.
In money markets, the total outstanding liquidity shortage at the end of the week increased further to Rs.171.84 billion against its previous weeks Rs.151.62 billion while the Domestic Operations Department (DOD) of Central Bank drained out liquidity during the week by way of 7 to 14 day repo auctions at weighted average yields ranging from 5.98% to 6.05%. The weighted average rates on overnight call money and repo was 5.90% and 5.93% respectively for the week while CBSL’s holding of Gov. Securities remained steady at Rs.1,469.84 billion.
USD/LKR
In the Forex market, the USD/LKR rate on spot contracts traded at Rs.202.97 to Rs.203.00 during the week while overall activity remained moderate.
The daily USD/LKR average traded volume for the first two trading days of the week stood at US $ 50.70 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)