Sri Lanka bond yields drop after syndicated loan

ECONOMYNEXT – Sri Lanka’s bond yields has dropped over two days after proceeds of a sovereign bond came to the market and overnight rates have also dropped as excess liquidity built up, dealers said.

Deputy Treasury Secretary S R Attygalle said last week that 550 million dollars from a sovereign bond has arrived in the country, and will be used to improve debt management.

A 4-year bond maturing on 01.03.2021 was quoted at 10.15/20 percent Monday after dropping from 10.40/50 levels to 10.20/30 percent on Friday.

A 6-year bond maturing 15.05.2023 was quoted at 10.45/50 percent Monday after dropping 10.74/80 to 10.50/60 percent.

A 9-year bond maturing on 01.08.2026 was quoted at 10.50/60 levels Monday after dropping from 10.85/95 to 10.65/75 Friday.

A 13-year bond maturing on 15.05.2030 was quoted at 10.75/85 percent Friday after falling from 11.00/10 to 10.90/11.00 percent Friday.

Sri Lanka’s bill yields rose over two week amid political uncertainty, but with stocks also falling.

However confidence had returned to bond markets, dealers said. Some bills were also retired this Friday.

In money markets the minimum overnight repo rate has come down from 8.60 percent to about 8.20 percent levels on Friday. Excess liquidity rose to 40.5 billion rupees from 25 billion rupees on Thursday.

Though markets are still liquid some dealers are going to the repo window from time to time because many market participants do not accept longer term bonds for repo.





The central bank’s Treasury bill stock has come down from 128 billion rupees on August 01, with 20 billion rupees of excess liquidity to 108.4 billion rupees on August 24, with 25 billion rupees of excess liquidity.

The data shows the credit has slowed and the central bank is sterilizing dollar purchases with the end of the balance of payments crisis.

On Monday the spot US dollar was quoted at 152.92/153.00 to the US dollar. (Colombo/Aug28/2017)

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