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Sri Lanka rupee closes flat at 196.60/197.00 levels in one-week forwards market

ECONOMYNEXT – Sri Lanka’s rupee closed flat at 196.60/197.00 levels to the US dollar in the one-week forwards market on Friday while bond yields remained unchanged, dealers said.

The rupee last closed in the one- week forward market at 196.00/197.00 to the dollar on Thursday.

Sri Lanka expects the GDP to grow between 3.0 to 3.5 per cent in the first quarter of 2021 with the rapid vaccination campaign rolled out giving people more confidence.

Sri Lanka’s Central Bank on Thursday decided to keep the interest at current levels. It said it will keep the interest rate low.

“…Further, the Board observed the recent uptick in certain market interest rates, and reemphasised its commitment to continue the low-interest rate structure until the economy shows signs of sustained revival, in the context of the low inflation environment,” CBSL said.

The central bank is keeping the rate at which money is injected at 5.50 per cent and the rate at which excess cash is withdrawn at 4.50 per cent.

In practice, it has been injecting (printing) money at below 5.10 per cent by placing a ceiling yield on Treasury auctions.

In the secondary market bond yields remained unchanged while the overall market witnessed moderate activity, dealers said.

Shorter tenor maturities slightly eased while the longer tenor maturities held steady.

A bond maturing on 15.12.2022 closed at 5.73/78 per cent on Friday, down from 5.75/78 per cent at Thursday’s end.

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A bond maturing on 15.11.2023 closed flat at 6.23/28 per cent on Friday, from Thursday’s end.

A bond maturing on 01.12.2024 closed at 6.62/70 per cent on Friday, down from 6.65/75 per cent at Thursday’s end.

A bond maturing on 01.05.2025 closed at 6.72/82 per cent on Friday, down from 6.75/85 per cent at Thursday’s end.

A bond maturing on 15.02.2026 closed flat at 7.05/15 per cent from the previous day’s end.

A bond maturing on 15.08.2027 closed flat at 7.45/48 per cent on Friday from the previous day’s close.

A bond maturing on 15.05.2030 closed flat at 7.90/8.15 per cent from Thursday’s end. (Colombo/March 05/2021)

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