Sri Lanka bond markets inactive ahead of rate decision
Mar 28, 2016 10:27 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka's bond markets were inactive Monday hit by uncertainty ahead of a rate decision Tuesday and auction Wednesday while one week forward US dollars were quoted around 147.55/75 rupees, dealers said.
In Money markets gilt backed repos were quoted at 7.90 percent and clean money at around 8.0 percent. In recent weeks some market participants have paid as much as 8.75 percent overnight instead of going to the reverse repo window at 8.0 percent.
There were no quotes for bonds, dealers said. Bond markets were also inactive last Thursday after a spike in Treasury bill yields.
Last week bids for bonds of 2020, 2021, 2022 and 2015 were rejected.
But in an auction closing on Wednesday bonds of 40 billion rupees with 10 billion rupees of securities up to a maturity of 2030 have been offered.
It is not clear why large volumes of tenors are called on Wednesday. There are expectations of a rate hike and most dealers are expected to avoid buying long tenors or put very high bids.
Dealers say there is a high level of uncertainty in markets with foreign investors also selling out.
Two year bonds maturing on 15.08.18 traded around 11.25 percent last week. Five year bonds maturing on 01.08.2021 were trade around 12.40 percent. Eight year bonds maturing 01.01.24 last traded at 12.70 percent. (Colombo/Mar28/2016)