Sri Lanka rupee ends weaker, gilt yields steady

ECONOMYNEXT – Sri Lanka rupee closed at 186.50/80 to the US dollar in the spot next on Wednesday while gilt yields remained steady in the overall market, dealers said.

The rupee closed at 186.00/30 in the spot next to the US dollar on Monday.

Sri Lanka offered 40 billion rupees of bills in a weekly Treasuries auction held today. Out of the 40 billion, only 34.3 billion rupees were sold, the debt office said.

After offering 22 billion rupees of 12-month bills 13.29 billion rupees were sold at 5.0 per cent, unchanged from last year.

After offering 12.5 billion rupees of 6-month bills, 13.2 billion rupees were sold at 4.76 per cent.

After offering 5.5 billion rupees of 3-month bills, 7.75 billion rupees of bills were sold at 4.65 per cent, from 4.64 per cent last week.

Sri Lanka has been printing unprecedented volumes of money to finance a budget deficit. Central Bank Governor W D Lakshman had said that the agency was using modern monetary authority.

In the secondary securities market, bond yields remained steady in moderate market activity.

“The secondary market witnessed mixed activities on selected maturities while overall market recorded moderate volumes. The mixed activity was seen on 15.11.22 maturity trading in the range of 5.75%-5.72% levels while 15.12.22 maturity traded at 5.77%, in addition, 15.10.27 traded at 7.20%. At the weekly T-bill auction held today, 3M and 6M bills were accepted at weighted averages of 4.65% up by 1bps and 4.76% respectively. Moreover, the benchmark 1-Yr T-bill was accepted at 5.00%,” FirstCapital Market Research noted in its daily report.

A 2-year bond maturing on 15.12.2022 closed at 5.73/79 per cent on Wednesday, up from 5.75/82 per cent at Tuesday’s closing.

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A bond maturing on 15.01.2023 closed at 5.80/85 per cent, steady from 5.80/88 per cent at Tuesday’s end.

A bond maturing on 15.09.2024 closed at 6.45/50 per cent, steady from 6.45/55 per cent at the previous day’s end.

A bond maturing on 01.05.2025 closed at 6.55/70 per cent, steady from 6.55/65 per cent on Tuesday.

A bond maturing on 01.02.2026 closed at 6.73/83 per cent, down from 6.75/83 per cent at the last closing.

A bond maturing on 15.08.2027 closed at 7.10/20 per cent, down from 7.13/23 per cent at the previous day’s end.

A bond maturing on 15.07.2028 closed flat at 7.25/40 per cent from Tuesday’s closing.
(Colombo/Dec02/2020)

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