The secondary market yield curve edged down on short to mid end of the curve amidst mixed investor sentiment while the market recorded limited with thin volumes.
Meanwhile, at the weekly T-Bill auction, weighted average yield rates edged low across the board.
CBSL also relaxed its monetary policy stance at its meeting on May 31, 2023 and decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) by 250bps to 13.00% and 14.00%.
As the week commenced, buying interest continued while investors speculated favourable outcomes on the DDO proceedings. 2026 and 2027 were the most active tenors as trades were observed throughout the week amid ultra-thin volumes. However, towards the latter part of the week subdued sentiment took over and slight selling interest emerged.
At the weekly Treasury Bill auction, total offered amount of Rs. 160.0Bn was fully accepted by CBSL whilst the weighted average yield rates edged down marginally as 3M, 6M and 1Yr bills fell to 25.65% (-1bps), 25.29% (-1bps) and 22.91% (-6bps) respectively.
In the Forex market, the Rupee appreciated further against the greenback with rupee being recorded at Rs. 295.5 compared to Rs. 303.3 recorded during the beginning of the week.
Courtesy: First Capital Research (May 31, 2023)