Sri Lanka rupee ends weaker, bond yields up

ECONOMYNEXT- Sri Lanka’s rupee closed weaker at 181.90/182.00 to the US dollar in the spot market on Wednesday while bond yields gained, dealers said.

The rupee closed at 181.62/70 to the greenback on Tuesday.

Liquidity in the overnight money market was 22.34 billion rupees, down from 23.70 billion rupees at yesterday’s close.

Banks deposited 23.44 billion rupees through Central Bank’s excess liquidity window.

There was no repo auction for the day.

In the secondary government securities market, bond yields gained in moderate trade, a dealer said.

Dealers also said that the 2024 bond maturities were the most liquid.

Sri Lanka’s bond yields are expected to move up 50 to 100 basis points across all maturities in 2020 due to higher state borrowings as a result of tax cuts and an expansion in the deficit, Dimantha Mathews, head of research at First Capital, an investment house told a business forum in Colombo.

However, analysts said a pick-up in growth to around 4.0 percent of the gross domestic product will help profits of publicly traded firms.

A bond maturing on 15.12.2021 closed at flat at 9.00/15 percent on Wednesday, up from 8.95/10 at Tuesday’s close.

A bond maturing on 01.09.2023 closed at 9.35/50 percent, gaining from 9.30/40 percent at Tuesday’s close.

A bond maturing on 15.09.2024 closed at 9.70/80 percent, climbing from 9.55/60 percent previous end.

A bond maturing on 15.10.2027 closed at 9.85/95 percent, gaining from 9.70/85 percent.

A bond maturing on 15.05.2030 closed at 9.95/15 percent gaining from its last close at 9.85/05 percent.

A bond maturing on 15.09.2034 closed at 9.95/25 percent, up from 9.85/05 percent at Tuesday’s close.
(Colombo/Feb19/2020)