Sri Lanka rupee ends weaker, gilt yields stable

ECONOMYNEXT – Sri Lanka’s rupee closed weaker at 182.30/40 to the US dollar on Tuesday and bond yields were flat, dealers said.

The rupee closed at 182.00/15 against the greenback in the spot market on Monday.

Sri Lanka’s central bank has busted the rupee from 4.70 to current levels since it was set up to print money in 1950.

A so-called ‘flexible exchange rate’ with money (liquidity management, rates) and exchange (convertibility undertakings) policies skewed against rupee stability has worsened instability since 2015, analysts have said.

India, Sri Lanka, Pakistan, Maldives, Mauritius as well as Dubai had the same Indian rupee based rate at the time.

Liquidity in the overnight money market was 23.58 billion rupees, marginally up from 23.37 billion rupees at the previous day’s close.

Banks deposited 38.50 billion rupees through Central Bank’s excess liquidity window.

In the secondary bond market, gilt yields remained unchanged, dealers said.

A bond maturing on 15.12.2021 closed at 8.75/82 percent unchanged from Monday.

A bond maturing 15.07.2023 closed flat at 9.85/90 percent.

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A bond maturing on 15.09.2024 closed at 10.23/30 percent on Tuesday, down from 10.25/30 percent at Monday’s close.

A 15-year bond maturing on 15.09.2034 closed at 10.78/85 percent, falling from 10.79/82 percent.
(Colombo/Oct01/2019)

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