The secondary market displayed relatively subdued activities on the back of thin volumes throughout the week amidst slight buying interest in the market. Accordingly, the weighted average yield budged down across the yield curve at the weekly T-Bill auction as 3M, 6M and 1Y maturities dropped over 10bps.
As the week commenced the secondary market witnessed slight foreign buying interest on the long end of the curve although, as the week progressed the yield curve remained broadly unchanged while the mid tenor maturities namely 2027 traded between 14.45% - 12.25%. while 2030 maturities traded between 14.45% - 11.50%. Towards the latter part of the week The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 8th Aug-23, decided to reduce the SRR to 2.0%.
At the weekly Bill auction 100% of the total offered were accepted. Accordingly, 03M weighted average yield was registered at 19.78%(-12bps), 06M was registered at 17.11% (-46bps) whilst 1Y was marked at 13.94%(-22bps).
In the Forex market, the rupee further depreciated against the greenback with rupee being recorded at Rs. 321.1 compared to Rs. 314.1 recorded during the beginning of the week.
Courtesy: First Capital Research (August 9, 2023)