Sri Lanka rupee ends firmer, bond yields ease
ECONOMYNEXT – Sri Lanka’s rupee closed firmer at 175.35/45 rupees to the US dollar in the spot market Thursday, while bond yields fell, market participants said.
The rupee closed at 175.55/65 against the greenback on Wednesday.
Liquidity in the overnight money market was 25.98 billion rupees, up from 18.9 billion rupees previous day.
Central Bank mopped up 12.91 billion rupees in an overnight repo auction at a rate of 7.77 percent.
In the government securities market, bond yields eased in an active market, dealers said.
The monetary-policy meeting held today concluded with Central Bank’s decision to hold the rates at current levels in a bid to maintain inflation at around 4.6 percent, despite weak credit,
Dealers said they had expected the rates remain unchanged, so there is no major impact on the market.
"I am expecting the rates to come down further because the rates have not eased in the lending side, so I am expecting the rates to come down at least by 25 basis points since there’s room for 50 basis points", a dealer said.
The dealers are expecting another rate cut towards the end of year.
A bond maturing on 15.10.2021 closed at 8.70/80 percent on Thursday, easing from 8.90/95 percent on Wednesday’s close.
A bond maturing on 15.03.2023 closed at 9.40/48 percent, down from 9.50/53 percent.
A bond maturing on 15.6.2024 closed at 9.73/78 percent, falling from 9.75/80 percent.
A bond maturing on 01.08.2026 closed at 9.93/98 percent, down from 10.02/07 percent.
A bond maturing on 15.01.2027 closed at 9.97/10.02 percent, declining from 10.08/12 percent yesterday’s close.
A 10-year bond maturing on 01.05.2029 closed at 10.05/15 percent, down from 10.15/22 percent.
(COLOMBO, 11 July 2019)