ECONOMYNEXT – Sri Lanka’s forex markets remained inactive on Friday as the forward exchange rates plunge in dollar/swap markets, continuing a trend of little or no outright trades, while gilt yields eased, market participants said.
Sri Lanka forex dealers have been barred from quoting above 200 to the US dollar.
Swap rates have been quoted and traded at steep discounts implying one year forwards at below 180 rupees with inflation differential inverted despite having a weak currency and money printing draining forex reserves steadily.
Spot/1 year swaps are quoted at a discount of 1700/1500 bp, spot/6 month at a discount of 900/840, the spot/3 month at 475/440, spot/2 month at 310/280, spot 1 months at 150/130 and spot/two weeks at 55/40, market participants said.
Banks were offering dollars’ telegraphic transfers at 198.0303/202.8896 on Wednesday unchanged from Tuesday
Sri Lanka’s imports were recorded at 1.7 billion US dollars in April, helped by incomes from 818 million dollars of exports and 519 million dollars of remittances, as the credit system loaned any savings back to the economy.
In the secondary market, bond yields remained steady, dealers said.
Bonds maturing on 15/12/2022 closed at 5.70/75 per cent on Friday, steady from 5.70/77 per cent on Thursday.
Bonds maturing on 15.11.2023 closed at 6.22/25 per cent on Friday, steady from 6.22/27 per cent on Thursday.
Bonds maturing on 01.12.2024 closed flat at 6.65/70 per cent on Friday,
A bond maturing on 01.05.2025 closed flat at 6.90/7.00 per cent on Fridday from Thursday’s close.
A bond maturing on 15.01.2026 closed flat at 7.25/33 per cent on Friday from Thursday’s close.
A bond maturing on 15.08.2027 closed flat at 7.45/65 per cent on Friday from Thursday.