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Weekly Govt Securities Market: 1-Year bill yield rises to nearly two months high

By First Capital Research

Weekly Yield Movement & Volume

The secondary market yield curve witnessed a slight upward shift mainly in the short to mid tenor maturities while the long end remained broadly unchanged. 

The market witnessed mixed activities during the week, with moderate volumes while activities were mainly centred on 2023, 2024, and 2027 maturities.

At the weekly Treasury Bill auction held on 7 January, the three-month bill declined to 7.50 per cent, while the six-month bill and one-year witnessed an increase of 11bps and 7bps, respectively, to 8.13 per cent and 8.52 per cent.

Furthermore, CBSL announced an issue of Rs 30.0 billion worth of Treasury Bonds through an auction to be held on 13 January 2020 and Rs 25.0 billion worth of Treasury Bills through the bill auction to be held on 14 January 2020.

Meanwhile, in the forex market, the rupee witnessed a depreciation to close the week at Rs 181.57 from Rs 181.30 held at the beginning of the week.

Liquidity & CBSL Holdings

Volatility in liquidity was witnessed, although it remained positive during the week. The lowest excess liquidity for the week was recorded on 2 January, amounting to Rs 27.7 billion and witnessed a gradual improvement towards the end of the week to Rs 40.5 billion on 8 January 2020. Meanwhile, CBSL holdings slightly declined to close the week at Rs 69.5 billion.