Pre-policy buying spree unfolds

By First Capital Research 

The secondary market displayed buying interest across the yield curve yesterday, with moderate trading volumes ahead of today’s monetary policy announcement.

Trading was predominantly centered on the belly-end of the curve, with notable activity across the 3-4 year tenors. Key trades included 2027 maturities, such as 15.09.27, 15.10.27, and 15.12.27, which traded within the 10.90%-10.73% range. 

Similarly, 2028 maturities, including 15.02.28 and 15.03.28, recorded trades between 11.10%-11.00%, whilst 01.05.28, 15.10.28, and 15.12.28 were traded between 11.25%-11.05%. Further out on the curve, 01.12.31 traded within the range of 11.65%-11.55% during the day.

Furthermore, CBSL has announced the issuance of Rs. 125.b in Treasury Bills through an auction scheduled for today. Of this, Rs. 45.0bn will be raised from 91-days maturity, Rs. 45.0bn from 182-days maturity, and Rs. 35.0bn from 364-days maturity.

Moreover, Sri Lanka recorded Rs. 702.0mn in foreign inflows into government securities for the week ending 21-Nov-2024, marking the 10th straight week of inflows, with total inflows into T-Bonds and T-Bills reaching Rs. 16.2bn.

Meanwhile, the overnight liquidity for the day was recorded at Rs. 140.7bn, whilst CBSL holdings remained stagnant at Rs. 2,515.6bn. Furthermore, in the forex market, the LKR slightly depreciated against the USD, closing at Rs. 291.1 for the day. 

On the other hand, LKR appreciated against most of the major currencies, notably the GBP, EUR, JPY, CNY, and AUD.