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One Year T-Bill yield spikes to near 4-month high

By First Capital

Weekly Yield Movement & Volume

During the week, the secondary market yield curve remained broadly unchanged while overall market witnessed limited activities with moderate volumes except on 13th     Wednesday which saw   buying interest during the early hours of trading before the weekly bill auction. Activities were mainly centred on 2022, 2023, 2024, and 2034 maturities. Amidst the rise in yields with the bill auction held on 13th, short tenor maturities rose up by 10-20bps while mid  tenors  increased by approximately  3bps  and long tenors shifted up by 4-8bps. Moreover, CBSL announced a treasury bond buy back scheduled to be held on 14th Nov under Open Market Operations amounting to LKR 12.0B on 15.03.22, 15.07.22 and 01.10.22 maturities.
At the weekly Treasury bill   auction held on Wednesday, the 3M was accepted at 7.56% up by 7bps while the 6M bill was rejected. The benchmark 1-Year was accepted at a weighted average of 8.51% up by 10bps in the forex market, the rupee appreciated to close the week at LKR 180.25 from LKR 180.92 held at the beginning of the week.

Liquidity & CBSL Holdings

Volatility in the liquidity was witnessed although it remained positive during the week. The highest excess liquidity for the week was recorded on 7th Nov  amounting to LKR  13.7B, which narrowed down to close the week at LKR 7.4B. Meanwhile, CBSL holdings slightly declined to close at LKR 83.1B.

Foreign Interest

Foreign holding in Government Securities increased by LKR 1.9B to record at LKR 114.3B while foreign holding percentage increased by 2.1%.

Maturities for next week

The Government security  market has to settle a treasury  bill  maturity amounting to LKR 19.3B during the week ending 22nd Nov 2019.