T-bill auction yields flat, buying sentiment rebounds

By First Capital Research

Reversing the cautious sentiment from the previous day, the secondary market sustained the buying interest in the 2028 and 2029 maturities, while renewed buying interest emerged in the 2031 and 2033 maturities. As a result, both volumes and overall activity reached moderate levels.

Amongst the traded maturities, 15.03.2028, 01.05.2028, 01.07.2028 and 15.10.2028 were seen changing hands between 8.70 percent to 8.80 percent. Moving ahead on the yield curve, the 15.06.2029, 15.10.2029 and 15.12.2029 maturities traded at the range of 9.42 percent to 9.32 percent. Additionally, the 15.03.2031 maturity traded at the rate of 9.95 percent, whilst 01.11.2033 changed hands between the rates of 10.65 percent and 10.58 percent.

Yesterday, the Central Bank held its weekly T-bill auction, raising Rs.113.0 billion, in line with the initially offered amount. The three-month bill raised Rs.12.4 billion, falling behind its initial offer of Rs.25.0 billion, with the yield steady at 7.55 percent. 

The six-month bill raised Rs.42.0 billion, with its yield rising slightly by 3bps to 7.78 percent. The 12-month bill raised Rs.58.5 billion, higher than the initial offer, while its yield remained unchanged at 7.94 percent. 

In the forex market, the Sri Lankan rupee depreciated against the greenback, closing at Rs.300.02/US dollar, compared to the previously seen rate of Rs.299.95/US dollar. Meanwhile, overnight liquidity in the banking system contracted to Rs.99.4 billion, from the previously seen level of Rs.110.8 billion.