(Week ended April 9, 2020) In the Forex market, the USD/LKR rate on spot contracts appreciated on Friday to a high of Rs.190.00 against its week’s low of Rs.199.75.
The daily USD/LKR average traded volume for the first two days of the week stood at US $ 103.25 million.
The Government Securities Market
The shortened trading week ending April 9, 2020 saw the weighted average yield on the market favourite 364 day bill declining sharply once again to hit over a four year low of 7.00%, while accumulating a total drop of 148 basis points over the past five weeks.
The primary Treasury bond auctions conducted during the week reflected bullish outcomes as well with maturities of 01.09.23, 15.09.24 & 15.10.27 recording impressive weighted averages of 8.50%, 8.70% and 8.90%.
This intern kept the secondary bond market bullish during the week as the yield curve recorded a parallel shift downward week on week, which was given a further boost by the possible US $ 1,400 million in SWAP lines from India and China.
The yields on the liquid maturities of 01.05.21, 01.10.22, 2023’s (i.e. 15.07.23, 01.09.23 & 15.12.23), 2024’s (i.e. 15.03.24 & 15.09.24) and 15.10.27 were seen declining to intraweek lows of 7.85%, 8.55%, 8.90%, 8.85%, 9.00%, 8.98%, 9.00% and 9.35% respectively against its previous weeks closing levels of 8.00/25, 8.80/85, 9.15/20, 9.20/28, 9.30/35, 9.35/40, 9.33/40 and 9.55/70.
The shortened trading week commencing April 15 will see Rs.30 billion on offer at the weekly Treasury bill auction, consisting of Rs.7 billion of the 91 day maturity, Rs.10 billion of the 182 day maturity and further Rs.13 billion of the 364-day maturity. At last week’s auction, the weighted average yields plunged on the 182 day and 364-day maturities to 6.80% and 7.00% respectively. All bids received on the 91-day Bill were rejected.
In money markets, overnight call money and repo rates averaged at 6.50% and 6.59% respectively for the week as the DOD (Domestic operations Department) of Central Bank injected liquidity during the week by way of 7 day, 88 day and 89 day reverse repo auctions at weighted average yields ranging from of 6.39% to 6.60%.
References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies