Rs 168 Bn T-Bill Auction Fully Subscribed; Rates Drop Across the Board For 4th Straight Week

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Daily report for the 01st January 2025 – Courtesy Wealth Trust Securities Ltd

  • Rs 168 Bn T-Bill Auction Fully Subscribed; Rates Drop Across the Board For 4th Straight Week
  • Secondary Bond Market Opens Year on a Cautiously Optimistic Note
  • Rupee Appreciates

At the inaugural weekly Treasury Bill auction for the year 2025, conducted yesterday, the weighted average rates declined across all three maturities for the 4th consecutive week. Accordingly, the weighted average rates on the 91-day tenor dropped by 07 basis points to 8.55%, the 182-day tenor by 05 basis points to 8.72% and the 364-day tenor by 02 basis point to 8.94%. Total bids received exceeded the offered amount by 2.42 times, and the entire Rs 168.00 billion on offer was successfully raised at the 1st phase in competitive bidding.

The 2nd phase of subscription for the auction will be opened across all 3 tenors at the weighted average rates until close of business of the day prior to settlement (i.e., 3.00 pm on 02.01.2024). Given below are the details of the auction;

The Secondary Bond Market kicked off the new year on a positive note with yields initially edging down on buying interest centered on mid-2028 tenors. However, profit taking pressure resulted in a reversal which saw rates close the day broadly steady. Market activity which was observed at healthy levels in the opening session, were seen tapering off and growing quiet towards the latter part of the day, as such overall transaction volumes were seen at subdued levels.

The 2027 tenors saw some selling pressure leading to rates edging up with the 15.09.27 and 15.12.27 maturities trading at the rates of 9.81% and 9.85% respectively. However, strong buying interest was observed on the mid-2028 tenors of 01.05.28 and 15.10.28 which were seen trading down ranges of 10.27%-10.25% and 10.35%-10.33%. For context the 15.10.28 maturity was issued at auction just 2 days prior at the weighted average of 10.42%. In addition, trades were seen on the 01.07.28 maturity at the rate of 10.30%. The 15.09.29 maturity changed hands at the rate of 10.68%. The medium tenor 15.05.30 maturities were seen trading within the ranges of 11.03%-11.00% 11.32%-11.30% respectively.

The total secondary market Treasury bond/bill transacted volume for 31st December 2024 was Rs. 7.56 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 8.00% and 8.11% respectively.

The net liquidity surplus stood at Rs. 149.50 billion yesterday. Rs 1.70 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 151.20 billion was deposited at the Central Banks SDFR (Standard Deposit Facility Rate) of 7.50%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts closed the day slightly appreciating to Rs. 293.10/293.30 as against its previous day’s closing level of Rs. 293.25/293.75.

The total USD/LKR traded volume for 31st December 2024 was US $ 84.86 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)