The secondary market commenced the week with a shift towards buying sentiment, transitioning from the selling spree observed in previous sessions, as investors sought further clarity despite the ISB restructuring deal secured by Sri Lanka last week.
However, the market took a breather post-deal, with investors adopting a cautious stance, awaiting definitive signals regarding interest rate movements in light of the restructuring deal, First Capital Research stated in its Weekly Government Securities Market report.
As the Rs. 138.0 bn T-bond auction approached, selling interest emerged. Nonetheless, following the weekly T-bill auction, buying interest was revived, predominantly focusing on the mid-end of the yield curve due to a decline in auction yields. Notably, yields decreased across the board over the week, with short-mid tenors experiencing significant declines of up to 18bps.
In the weekly T-bill auction, CBSL fully subscribed to the total offered amount of Rs. 105.0 bn. Auction yields experienced a decline of over 9bps across the board, following a period of stagnation in the previous week’s auction.
CBSL accepted the total offered for the 91-day, 182-day, and 364-day maturities, at WAYRs of 9.91% (-16bps), 10.10% (-9bps), and 10.21% (-10bps).
Foreign reserves increased by USD 232.0 mn to USD 5,642.0 mn in Jun 2024 from USD 5,410.0 mn in May 2024.
The aggregate reserves included proceeds from a swap with the People’s Bank of China amounting to USD 1,400.0 mn.
Meanwhile, the AWPR rebounded after a 5-week decline, rising by 26bps to 9.04%.
In the forex market, the Rupee marginally depreciated against the USD, with the rupee recorded at Rs. 304.2 compared to Rs. 304.1 at the beginning of the week.
