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Sri Lanka rupee makes dizzy gains in intra-day trade towards 190 to dollar

ECONOMYNEXT – Sri Lanka rupee made steep gains in intra-day trade Thursday amid selling by a state name that usually acts for the monetary authority, dealers said, while bond yields edged up.

The rupee gained to 194.50/195.00 levels in the one week forward market after falling as low as 200.50 a day earlier, dealers said.

The spot US dollar also traded at different rates some at 192/193.00 levels and even stronger dealers said.

The spot market had been inactive after liquidity injections pressured the rupee amid a Coronavirus crisis. Sri Lanka’s rupee had come under pressure from liquidity injections in the past even when there was no external turmoil.

Analysts have called for central bank reform to maintain monetary stability and avoid multiple notch downgrades.

The rupee has come under pressure amid large liquidity injections made from late February.

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In the secondary government securities market, yields fell in moderate trade, while 2023 and 2024 maturities remained more liquid, dealers said, ahead of a bond auction.

A bond maturing on 01.05.2021 was quoted 8.80/90 percent on Thursday, up 8.75/85 percent at Wednesday’s close.

A 2-year bond maturing on 01.10.2022 was quoted at 8.45/55 percent, up from 8.35/55 percent at Wednesday’s close.

A bond maturing on 01.09.2023 was quoted at 8.85/95 percent, from 8.70/90 percent at the previous close.
A bond maturing on 15.09.2024 was quoted at 9.00/9.10 percent on Thursday, climbing from 8.90/9.10 percent.

A bond maturing on 15.10.2027 was quoted at 9.30/40 percent up from 9.25/40 percent at Wednesday’s close.

A bond maturing on 15.05.2030 was not quoted.

A bond maturing on 15.09.2034 was not quoted. It closed at 10.00/40 percent in its last close on Friday. (Colombo/ Apr09/2020)

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