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Sri Lanka rupee ends flat at 196.00/197.00 levels in one-week forwards market

ECONOMYNEXT – Sri Lanka’s rupee closed flat at 196.00/197.00 levels to the US dollar in the one-week forwards market on Thursday while bond yields remained unchanged after the monetary policy review, dealers said.

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

Sri Lanka’s Central Bank decides 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The central bank is keeping the rate at which money is injected at 5.50 per cent and the rate at which excess cash is withdrawn at 4.50 per cent.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 thin activity, dealers said.

A bond maturing on 15.12.2022 closed at 5.75/78 per cent on Thursday, up from 5.65/73 per cent at Wednesday’s end.

A bond maturing on 15.11.2023 closed at 6.23/28 per cent on Thursday, up from 6.18/23 per cent at Wednesday’s end.

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

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A bond maturing on 01.05.2025 closed at 6.75/85 per cent, down from 6.85/05 on Thursday at Wednesday’s end.

A bond maturing on 15.02.2026 closed at 7.05/15 per cent, steady from 7.05/25 per cent at the previous day’s end.

A bond maturing on 15.08.2027 closed at 7.45/48 per cent, up from 7.35/50 per cent at the previous day’s close.

A bond maturing on 15.05.2030 closed at 7.90/8.15 per cent on Thursday, down from 8.10/50 per cent. (Colombo/March 04/2021)

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