Government Securities Market (Week ended January 21, 2022) | Sunday Observer

Government Securities Market (Week ended January 21, 2022)

23 January, 2022

The secondary bond market continued to remain inactive during the shortened trading week ending 21st January as most market participants persisted to be on the sidelines. The first monetary policy announcement during the week for the year saw the Central Bank of Sri Lanka increases its policy rates by 50 basis point each to 5.50% and 6.50% on its Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR).

The limited trades witnessed prior to the policy adjustment were on the maturities of 15.12.22 15.05.23, 15.03.25 and 01.12.31 at levels of 8.80%, 9.50%, 11.05% and 11.92% to 12.04% ywhile 15.12.22 and 15.09.24 maturities were traded at levels of 9.20% to 9.29% and 10.25% respectively, following the policy adjustment.

Nevertheless, an all-time high offered volume of Rs.97 billion at a weekly Treasury bill auction was fully subscribed during the week, which was conducted prior to the policy adjustment while weighted average rates increased by 11 and 4 basis points each to 8.49%, 8.44% and 8.48% on the 91-day, 182-day and 364-day maturities.

Meanwhile, the National Consumer Price Index (NCPI; Base 2013=100) for the month of December increased steeply to a high of 14.00% on it’spoint to point against its previous month’s figure of 11.1% along with the annual average increasing as well to 7.0% from 6.2%.

In money markets, the base rate increase resulted in weighted average rates on overnight call money and repo increasing during the last two trading days of the week to average 6.45% and 6.50% respectively, as against its first two days of 5.95% and 6.00%.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)

Courtesy: Wealth Trust Securities Ltd