The dip in yields was mainly driven by the two five year maturities (i.e. 01.04.18 and 15.08.18) as it opened Thursday at an intraday day high level of 11.40/45% and dipped to an low of 11.00/05%. However profit taking coupled with selling pressure at these levels saw its yields increase once again marginally, to close the day at levels of 11.05/10%.
Interestingly, the yield curve was showing signs of reflecting an inversion once again as the longer tenure maturities were seen trading below the 364 day bill level of 11.10% to 11.15%. Given below are the closing, secondary market yields for the most frequently traded maturities:
Meanwhile in money markets, Central Bank’s Open Market Operations (OMO) department continued to mop up liquidity on an overnight basis by way of a Repo auction as it drained Rs. 28.2 billion at a weighted average of 8.44%. A further Rs. 3.7 billion was deposited at CBSL’s repo window of 7.50%. This led to overnight call money and repo rates remaining stable to average 9.62% and 8.86% respectively.
However all bids were rejected for the sale of outright bills (11 days and 18 days) yesterday, a first of such an auction since August 2012, a tool mainly used to drain liquidity further.
Rupee remains above Rs. 127
The rupee remained stable at levels of Rs. 127-Rs.127.10 on Thursday as volumes traded remained rather moderate. The total USD/LKR traded volume for the previous day (23.01.13) stood at US $ 56.75 million. Given below are some forward dollar rates that prevailed in the market: one month – 128.05, three months – 129.94 and six months – 132.39