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)