CBSL keeps OPR unchanged whilst secondary market mood remains cautious

By First Capital Research

The secondary market recorded moderate trading volumes following the CBSL’s decision to maintain the OPR at 7.75 percent. 

Buying activity emerged at the short end, whilst sentiment towards the long end remained cautious.

Among the trades that took place yesterday, at the short end, the 15.09.2027 maturity traded between 8.70 percent to 8.75 percent, followed by the 15.12.2027 maturity, which traded between 8.90 percent and 8.95 percent. 

Moving on to the 2028 maturities, the 15.02.2028 and 15.03.2028 bonds traded within a narrow band ranging from 8.99 percent to 9.00 percent. The 01.05.2028 bond traded within 9.06 percent to 9.09 percent, whilst the 15.10.2028 and 15.12.2028 maturities traded at a rate of 9.20 percent. 

In the 2029 segment, the 15.06.2029 maturity traded between 9.55 percent and 9.60 percent, followed by the 15.09.2029 and 15.10.2029 bonds, which transacted between 9.62 percent and 9.65 percent. 

The PDMO conducted its weekly T-bill auction yesterday, raising Rs.125.0 billion in line with the initial offer. The issuance comprised Rs.35.0 billion of three-month bills, Rs.70.0 billion of six-month bills and Rs.20.0 billion of 12-month bills. 

The weighted average yields declined across all maturities, settling at 7.84 percent, 8.26 percent and 8.36 percent for the three-month, six-month and 12-month tenures, easing by 9bps, 10bps and 11bps, respectively.

On the external front, the Sri Lankan rupee depreciated against the US dollar, closing at Rs.309.61/US dollar, compared to Rs.309.56/US dollar seen previously. Overnight liquidity in the banking system expanded to Rs.211.53 billion, from Rs.163.50 billion recorded previously.