Sri Lanka rupee close weaker, gilt yields up

ECONOMYNEXT – Sri Lanka rupee closed weaker at 184.35/45 to the US dollar on Thursday while bond yields end wider on selling pressure after the central bank kept its policy rate unchanged, dealers said.

The rupee closed at 184.20/30 against the greenback on Wednesday.

In the money market, liquidity was 203.34 billion rupees today, down from 210.69 billion rupees on Wednesday.

The Central bank kept its rates at 5.50 per cent to inject liquidity (the Standing Lending Facility Rate (SLFR)) and 4.5 per cent to withdraw liquidity or Standing Deposit Facility Rate (SDFR) on the signs of credit picking up in October and the impact of the new COVID-19 outbreak in the country expected to be short lived.

However, market analysts at FirstCapital Research said that the investor sentiment was hindered with CBSL continuing its accommodative monetary policy stance as most market participants were anticipating for a rate cut.

Thereby in the secondary securities market bond yields shot up on selling pressure, dealers said.

A 2-year bond maturing on 15.12.2022 closed at 5.55/65 per cent on Thursday, up from 5.40/50 per cent at Wednesday’s closing.

A bond maturing on 15.01.2023 closed at 5.60/70 per cent on Thursday, gaining from 5.40/55 per cent at the last closing.

A bond maturing on 15.09.2024 closed at 6.05/15 per cent, climbing from 5.97/03 per cent at the previous closing.

A bond maturing on 01.05.2025 closed at 6.35/45 per cent on Thursday, up from 6.20/35 per cent at its last closing.

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A bond maturing on 01.02.2026 closed at 6.57/63 per cent on Thursday, up from 6.45/55 per cent.

A bond maturing on 15.08.2027 closed at 6.85/93 per cent, up from 6.70/85 per cent.

A bond maturing on 01.07.2028 closed at 7.05/10 per cent, up from 6.85/7.05 per cent.

A 10-year bond maturing on 15.05.2030 closed at 7.35/45 per cent, up from 7.10/30 per cent at the previous day’s end. (Colombo/Oct22/2020)

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