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Sri Lanka rupee at new low, bond yields fall

ECONOMYNEXT – Sri Lanka bond yields fell Monday and the while the rupee continued to slide in the one week forward market dealers said, with unprecedented volumes of money being ‘helicopter dropped’ into the credit system while the people are struggling to contain the spread of Coronavirus.

The rupee had closed around 199.75/199.90 to the US dollar in the one week forward market dealers said with deals done above 199.50 to the US dollar.

On Friday the rupee had traded at over 196 to the US dollar in the one week market, while one year deals were quoted around 200 rupees.

The rupee had come under pressure after unprecedented liquidity injections were made by the Central Bank despite operating a soft-peg with little credibility.

Liquidity in the overnight money market was 111.81 billion rupees, up from 118.09 billion rupees.
Banks deposited 117.11 billion rupees in the central bank’s excess liquidity window.

In the secondary government securities market, yields fell in moderate trading, dealers said with 2022 and 2024 maturities being more liquid.

A bond maturing on 15.12.2021 was not quoted.

A 2-year bond maturing on 01.10.2022 was quoted at 8.50/60 percent down from 8.80/85 percent.

A bond maturing on 01.09.2023 was quoted at 9.95/10 percent, up from 9.20/25 percent on Friday’s close.

A bond maturing on 15.09.2024 was quoted at 9.15/20 percent down from 9.30/40 percent.

A bond maturing on 15.10.2027 was quoted at 9.40/50 percent down from 9.55/70 percent at Friday’s close.

A bond maturing on 15.05.2030 was not quoted.

A bond maturing on 15.09.2034 was not quoted. It closed at 10.00/40 percent in its last close.
(Colombo/ Apr06/2020)