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Sri Lanka rupee marginally weaker, bond yields ease after rate cut

ECONOMYNEXT – Sri Lanka’s rupee closed around 188.30/50 to the US dollar in the spot market Monday with one month forwards quoted around 189.00/189.50 dealers said while bond yields eased about 30 basis points after a 50 basis point rate cut last week.

There was less activity in forex markets with uncertainty after a rate cut, dealer said.

Sri Lanka’s rupee strengthened to 187.50/188.00 to the US dollar on the one wee forward market on Wednesday from around 189.00/189.50 to the US dollar a day earlier.

One week’s were quoted as strong as 186.15/60 to the US dollar in intra-day trade, before weakening towards close, dealers said.

Stocks closed 4.1 percent down with a sensitive index falling 10.1 percent after 38 seconds of trading, when markets re-opened after a 7 week closure.

Bond yields came down by 30 basis points as profit taking settled around 20 basis points, dealers said.

Liquidity in the overnight money market wad 136.03 billion rupees down from 155.19 billion rupees last Wednesday.

Banks deposited 142.20 billion rupees in cntral bank’s excess liquidity window on Monday.

In the secondary government securities market, bond yields eased in moderate trading with liquidity centered on 2024 maturities, dealers said.

A bond maturing on 15.12.2021 closed at 7.05/20 percent down from 7.25/40 percent from Wednesday.

A 2-year bond maturing on 01.10.2022 closed at 7.70/77 percent down from 7.95/8.03 percent at Wednesday’s close.

A bond maturing on 01.09.2023 closed at 8.05/15 percent down from 8.30/40 percent.

A bond maturing on 15.09.2024 closed at 8.52/58 percent on Monday up from 8.72/75 percent Wednesday.

A bond maturing on 15.10.2027 was quoted at 8.83/90, down from 9.00/9.04 percent Wednesday. (Colombo/May11/2020)