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Sri Lanka rupee quoted weaker 200/201.75 to one week dollar

ECONOMYNEXT – Sri Lanka’s rupee quoted at 200/201.75 to the one week dollar in mid morning trade Thursday while yields were unchanged, dealers said.

The rupee last closed in the one-week forward market at 199.75/201 to the US dollar on Wednesday.

In Sri Lanka the rupee usually strengthens in the first week of April, at least in years without massive money printing and seasonal expansion in reserve money is partly met by central bank purchases of dollars.

There are usually remittances, bonus payments and early salary payments by export firms to staff going home for the traditional New Year holidays and schedule maintainance of factories

In money printing years, when balance of payments crises are triggered, pressure on the rupee mounts from the last week of April and May, analysts who track policy errors of Sri Lanka’s soft-peg say.

In the secondary market bond yields are flat in dull trade, dealers said.

Dealers say the market is waiting for some direction with Treasuries auction getting barely subscribed and unsold bills being taken up by the Central Bank

Sri Lanka’s banks borrowed 64.6 billion rupees overnight on Wednesday up from 46 billion rupees a day earlier, keeping call money rates rock solid at 4.65 percent amid wide open taps, official data show as the rupee dipped below 200 to the US dollar.

In previous crises, liquidity shortages have been found mostly in state-run banks that finance the budget through overdrafts shorting reserves when they do not have deposits, analysts say.

State banks are also asked to subsidize losses at state energy enterprises, adding further pressure on the rupee.

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A bond maturing on 15.12.2022 quoted at 5.85/95 per cent on Thursday, steady from 5.85/92 per cent on Wednesday.

A bond maturing on 15.11.2023 was quoted at 6.30/40 per cent, up from 6.30/38 per on Wednesday.

A bond maturing on 01.12.2024 was quoted flat at 6.65/75 per cent.

A bond maturing on 01.05.2025 was quoted at 6.80/95 per cent, up from 6.75/95 per cent on Wednesday.

A bond maturing on 15.02.2026 quoted at 7.05/20 per cent on Thursday, up from 7.00/15 per cent on Wednesday.

A bond maturing on 15.08.2027 was quoted at 7.50/65 per cent, up from 7.40/60 per cent.

A bond maturing on 01.05.2029 was quoted flat at 7.90/20 per cent steady from 8.00/20 per cent on Wednesday.

A bond maturing on 15.05.2030 was quoted at 8.00/50 per cent, up from 8.00/30 per cent on Wednesday. (Colombo/April 01/2021)

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