ECONOMYNEXT – Sri Lanka’s bond yields in the secondary market were steady while the rupee remains inactive in the forex market on Wednesday, market participants said.
Sri Lanka has paid back a sovereign bond repayment on Tuesday and a coupon, without default however experts on the topic say it will lead to a further decline in foreign assets.
After the repayment, the treasury bill stock went up to 1,135.5 billion rupees from 922 billion rupees.
In addition to the Treasury bills, the central bank has also advanced another 198.2 billion rupees by so-called ‘provisional advances’, which is an interest-free printed money overdraft facility.
Amidst the repayment, the Sri Lanka stock market too gained on Wednesday reversing losses seen in the last two days.
In the money markets, two currency exchange traders in Colombo said the US dollar’s black market buying rate was around 222 rupees and the selling rate was around 223 rupees.
Sri Lanka’s interbank forex markets are not allowed to deal above 200 to the US dollar and import customers are not allowed to be given dollars above 203 to the US dollar in curbs announced after money printing triggered forex shortages.
The central bank’s indicative spot rate was 199.9000 on July 28, up from 199.9076 on July 27.
The buying rate for telegraphic transfers was 197.9023 and the selling rate was at 202.8977 on Wednesday, from 197.8023/202.8977 on Thursday.
In bond markets, short tenor gilt yields were steady while the long tenors remained unchanged.
Some short-tenor yields were down.
A 2-year bond maturing on 15.12.2022 closed at 5.68/75 on Wednesday, down from 5.75/85 per cent on Tuesday on Tuesday.
A bond maturing on 15.11.2023 closed flat at 6.35/40 per cent on Wednesday from Tuesday’s closing.
A bond maturing on 1.12.2024 closed at 6.78/87 percent on Wednesday, down from 6.80/88 per cent on Tuesday.
A bond maturing on 01.02.2026 closed flat at 7.35/50 per cent unchanged on Wednesday.
A bond maturing on 15.08.2027 closed at 7.60/90 per cent on Wednesday, down from 7.55/80 per cent from the last closing.
A 10-year bond maturing on 15.05.2030 closed at 8.40/60 per cent on Wednesday, up from 8.25/85 per cent from the last closing. (Colombo/July28/2021)