The week opened with lacklustre sentiment, amid less participation as investors chose to be on the sidelines ahead of the monetary policy review meeting. Hence, the secondary market yields remained broadly stable. However, weighted average yields at the weekly T-Bill auction, surged over 10bps after four-weeks of a down trend.
The secondary market displayed a dull performance during the week as investor interest was toned down while activities were limited. In the midst of thin volumes, 2026 and 2027 maturities were seen trading consecutively during the week within a range of 12.97%-13.15%.
At the monetary policy review meeting, the CBSL decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 11.00% and 12.00%, after considering the recent and expected developments in the domestic and global economy and macroeconomic projections.
At the weekly Treasury Bill auction, the CBSL accepted 96.0% of the offered Rs. 130.0 bn, with full acceptance of 91-day and 182-day maturities. Weighted average yields budged up during the auction after four-consecutive weeks with 91-day maturity recording the biggest increase of 42bps to 17.97%, while the 182-day and 364-day maturities weighted average yields increased by 16bps to 15.03% and 12bps to 13.31%.
Courtesy: First Capital Research (Aug 23, 2023)