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Sri Lanka bond yields close lower, forex markets quiet

ECONOMYNEXT – Sri Lanka’s bond yields were down on Wednesday and there was sporadic activity in forex markets around 185.80 levels, dealers said, bond yield fell and the stock market was closed.

Several banks were also running disaster recovery sites and in scattered locations market participants said aid while most businesses were also closed in a three week Coronavirus holiday.

Sri Lanka’s rupee ended at 183.85/184.05 to the US dollar on Friday.

A one week forward dollar was quoted around 185.50 but the market was not active, market participants said.

Sri Lanka has injected around 120 billion rupees in to money markets, in recent weeks incliding a central bank profit transfer raising concerns for the rupee.

Sri Lanka’s private credit is however low but uneasy foreign investors are selling out.

Banks deposited 53.10 billion rupees in central bank’s excess liquidity window on Wednesday while another 60 billion rupees was mopped up.

Public debt office data showed that Sri Lanka’s treasury yields fell over 14 percent across all maturities at the weekly bill auction held today.

In the secondary government securities market, yields came down in active trading due to prospects of a 500 million dollar loan coming from the Chinese Development Bank (CDB), dealers said.

Dealers also said that the 2024 maturities were more liquid.

A 12-month Treasury bill was quoted 8.32/48 percent after a 16 basis point rate, down from 8.48/ 46 on Wednesday.

A bond maturing on 15.12.2021 was quoted at 8.65/80 percent down from 8.85/9.00 percent on Tuesday.

A newly auctioned 2-year bond maturing on 01.10.2022 was quoted at 9.03/07 percent down from 9.20/28 percent.

A bond maturing on 01.09.2023 was quoted at 9.30/40 percent down from 9.55/65 percent.

A bond maturing on 15.09.2024 was quoted at 9.58/65 down from 9.76/82 percent on Tuesday.

A bond maturing on 15.10.2027 was quoted at 09.80/90 percent down from 9.85/90 percent.

A bond maturing on 15.05.2030 was not quoted in early trade.

A bond maturing on 15.09.2034 was not quoted. It closed at 10.00/40 percent Friday. (Colombo/ Mar18/2020)