ECONOMYNEXT – Sri Lanka’s overnight rates spiked to 5.75 percent on Thursday after a 50 basis point rate hike, up from 5.10/20 percent a day earlier while bond yields were up around 30 to 40 basis points, market participants said.
The central bank raised its policy rate at which money is injected to markets at 6.00 percent from 5.50 percent.
The monetary authority was however injecting large volumes of money through de facto policy rate below the overnight rate below the overnight rate.
The de facto rate was raised by 05 basis points over the past two weeks.
A statutory reserve ratio was also raised by 02 percent which may take an estimated 120 billion rupees from bank rupee reserves.
Some banks are already short by around 113 billion rupees while some are plus 80 billion rupees.
Interbank call money was quoted at 5.60/70 percent up from 5.00/10 percent a day earlier.
A Bond maturing on 15.12.2022 quoted at 6.10/20 percent on Thursday from 5.75/85 percent on
A bond maturing on 15.11.2023 was quoted at 6.70/6.80 percent from 6.35/45 per cent on Wednesday
A bond maturing on 01.12.2024 was quoted at 7.80/85 up from 7.15/25 percent on Wednesday
A bond maturing on 01.02.2026 was quoted at 8.75 bid no offers 7.45/65 percent on Wednesday. (Colombo/Aug18/2021)