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Sri Lanka rupee bond yields fall after rate cut, sovereign yields up

ECONOMYNEXT – Sri Lanka’s rupee bond yields fell at open after a rate cut, sovereign bond yields were up, and there were no two way quotes for the rupee in the spot market after closing sharply down Friday in forward markets, dealers said.

Sri Lanka’s central bank cut rates Friday by 25 basis points as the rupee slid to record lows.

The rupee had traded around 195.50 to 196.00 to the US dollar levels in the one week forward market, dealers said. The rupee had been quoted at even lower levels in one year forwards, implying an even lower closing Friday dealers said.

Yields on dollar denominated sovereign bonds picked up after the rate cut, losing some of the advances made after Treasury secretary S R Attygalle boosted investor confidence by saying the government had no intention of defaulting on sovereign bonds.

In the secondary government securities market, yields came down in moderate trading, dealers said.
Dealers also said that the 2022, 2023 and 2024 maturities were more liquid.

A bond maturing on 15.12.2021 was not quoted.

A 2-year bond maturing on 01.10.2022 was quoted at 8.55/65 percent down from 8.85/90 percent.

A bond maturing on 01.09.2023 was quoted at 9.00/10 percent, down from 9.15/25.

A bond maturing on 15.09.2024 was quoted at 9.12/20, down from 9.30/35 percent.

A bond maturing on 15.10.2027 was quoted at 9.35/45 percent down from 9.45/65 percent.

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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)