T-Bill auction yields decline for 10th consecutive week

By First Capital Research

Yesterday’s Treasury Bill auction saw a decline in rates across the board for the 10th consecutive week. 
The CBSL raised a total of Rs. 157.5bn with the total offered amount being fully accepted, where the 03M and 06M T-Bills were oversubscribed, while the 12M T-bill was undersubscribed. 

The 03M T-Bill was accepted at Rs. 44.1bn, the 06M T-Bill was accepted at Rs. 83.4bn, and the 12M T-Bill was accepted at Rs. 30.0bn. The weighted average yield rates saw declines, where the 03M bill saw a decline of 10bps at 7.69 percent, the 06M bill saw a decline of 6bps at 7.94%, and the 12M bill saw a decline of 1bps at 8.42%. 
The secondary market yield curve experienced some buying interest on the short to mid end of the curve, with notable trades amongst the 2027, 2028, 2029, 2030, and 2032 maturities.

On the short end of the curve, 01.05.27, and 15.12.27 traded at rates of 9.50%, and 9.85%, respectively. On the belly end of the curve, 15.02.28, 15.03.28, 01.05.28, 01.07.28, and 15.10.28, traded at rates of 10.10%, 10.13%, 10.25%, 10.34%, and 10.40% respectively. 15.09.29, 15.05.30, 15.10.30, and 01.07.32 traded at rates of 10.87%, 11.05%, 11.26%, and 11.48% respectively. 

On the external front, the LKR appreciated against the USD, closing at Rs. 297.5/USD compared to Rs. 297.7/USD recorded the previous day. CBSL holdings of government securities remained unchanged, closing at Rs. 2,511.92bn yesterday. Overnight liquidity in the banking system expanded to Rs. 163.50bn from Rs.153.52bn recorded the previous day.