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Sri Lanka rupee quoted weaker, gilt yields slightly down

ECONOMYNEXT – Sri Lanka rupee was quoted weaker at 185.10/20 to the US dollar on Thursday while bond yields eased marginally in the overall market, dealers said.

The rupee closed at 184.75/90 against the greenback on Wednesday.

A Colombo based think-tank said that Sri Lanka should be careful about inflation as credit up with money being printed to support emergency coronavirus crisis fund.

“If persisted with for any length of time, the monetary financed stimulus can push up inflation,” Institute of Policy Studies said ahead of the release of its State of the Economy report.

Credit growth to the private sector remains sluggish at 5.2 per cent as of August 2020 while money supply growth has picked up sharply, at 17.5 per cent in August 2020 compared to 7 per cent at end 2019, IPS said.

Sri Lanka’s interest rates have fallen amid weak credit growth and the central bank also cut rates.

In the secondary securities market, bond yields eased marginally while the overall the market was active, dealers said.

A 2-year bond maturing on 15.12.2022 was quoted at 5.50/55 per cent on Thursday, down from 5.52/57 per cent at Wednesday’s closing.

A bond maturing on 15.01.2023 was quoted at 5.55/58 per cent on Thursday, up from 5.53/58 per cent at the last closing.

A bond maturing on 15.09.2024 was quoted at 6.03/05 per cent, up from 6.00/10 per cent at the previous closing.

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A bond maturing on 01.05.2025 was quoted at 6.28/33 per cent on Thursday, up from 6.25/33 per cent at the last closing.

A bond maturing on 01.02.2026 was quoted at 6.55/58 per cent on Thursday, up from 6.50/60 per cent at Wednesday’s end.

A bond maturing on 15.08.2027 was quoted at 6.80/87 per cent, steady from 6.80/90 per cent at the previous day’s end.

A bond maturing on 01.07.2028 was quoted at 7.05/12 per cent, stable from 7.05/15 per cent at the previous day’s end.

A 10-year bond maturing on 15.05.2030 was quoted at 7.25/40 per cent, stable from 7.25/35 per cent at the previous day’s end. (Colombo/Oct15/2020)

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