T-Bill yields nudge slightly higher, secondary market stalls

By First Capital Research

Ahead of the T-Bond auction scheduled for July 11, market participants remained on the sidelines yesterday, leading to a dormant day in the secondary market. 

Given this setting, notable trades appeared scarce, as the yield curve held firm across the board. 

The Central Bank concluded its weekly Treasury Bill auction yesterday, raising Rs. 66.5bn, below the initial offer of Rs. 72.5bn as yields edged marginally higher across all maturities. 

The 3M bill generated Rs. 11.4bn, with its weighted average yield rising by 5 bps to 7.60%. The 6M bill raised Rs. 46.2bn, recording a 6bps increase to 7.84%. 

Meanwhile, the 12M bill drew just Rs. 8.9bn, with its yield climbing 5bps to 7.99%.

In the forex market, the LKR depreciated against the greenback, closing at Rs. 300.6/USD, compared to the previously seen rate of Rs. 300.2/USD. Meanwhile, overnight liquidity in the banking system expanded to Rs. 105.0bn from the previously seen level of Rs. 88.6bn.