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Saturday October 1st, 2022

Sri Lanka bond markets stumped after President’s comments

ECONOMYNEXT – Sri Lanka’s bond markets were frozen Monday with a few maturities being offered at higher yields but no firms bids, dealers said in the wake of President Ranil Wickremesinghe’s comments Friday over possible rupee bond restructuring.

A bond maturing on 01.06.2025 was offered around 28.00 percent Monday with no firm bids up from 27.55/65 percent on Friday.

Bond maturing on 15.01.2028 offered at 25.00 percent with no firm bids, up from 24.00/25.50 percent Friday morning.

There were no quotes or trading in other securities.

There were no quotes for the 3 month bill which was quoted at 26.50/27.00 on Friday morning.

There were also no quotes for the 12 month bill at 28.00/29.00 percent.

There are concerns over this week’s bids for auctions.

Senior government officials insist that there are no plans to re-structure domestic debt, but the President Ranil Wickremesinghe gave voice to speculation that foreign investors may pressure Sri Lanka to hair cut domestic debt.

A steep depreciation of the rupee however automatically imposes a ‘hair cut’ on domestic debt as the overall gross domestic product and nominal tax revenues inflate. (Colombo/Aug09/2022)

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