Auction results fall short while yield curve shows marginal uptick

By First Capital Research

Ahead of today’s T-bond auction, the secondary market yield curve witnessed subdued activity and low trading volumes, with the yield curve showing only marginal movement.

Amongst the notable trades, the maturities of 15.02.2028 and 15.03.2028 were traded within the 8.85 percent to 8.95 percent range, while the 15.10.2028 maturity traded between the rates of 9.00 percent and 9.05 percent. Moreover, the 15.05.2030 maturity traded at the rate of 9.70 percent and the 15.03.2031 maturity changed hands at 10.05 percent.

Yesterday, the Central Bank accepted Rs.59.2 billion at its weekly T-bill auction, below the targeted Rs.77.0 billion, despite total bids reaching Rs.128.6 billion. For the three-month tenure, Rs.5.2 billion was accepted, with the yield remaining unchanged at 7.58 percent. The six-month bill saw the largest uptake, with Rs.48.2 billion accepted at a steady weighted average yield of 7.89 percent. In the 12-month maturity, Rs.5.8 billion was accepted, with the weighted average yield dropping by 1bps to 8.02 percent. 

In the forex market, the Sri Lankan rupee appreciated against the greenback, closing at Rs.301.9/US dollar, compared to Rs.302.0/US dollar seen previously. Meanwhile, overnight liquidity in the banking system contracted marginally to Rs.160.6 billion, from the previously recorded level of Rs.160.9 billion.