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Sri Lanka rupee steady, bond yields flat

ECONOMYNEXT – Sri Lanka’s rupee closed around 188.25/45 to the US dollar Tuesday hardly changed form a day earlier after being actively quoted, dealers said while bonds remained stable from yesterday, dealers said.

On Monday the rupee closed around 188.30/50 to the US dollar.

Sri Lanka is going through a consumption collapse after two months of curfews and private credit growth is expected to be low in 2020.  The rupee came under pressure from money printed to target interest rates and finance the deficit before private credit eased.

The money printing has led to a weakening of the confidence in Sri Lanka’s sovereign debt and had also earned the country a downgrade.

Liquidity in the overnight money market was 136.19 billion rupees unchanged yesterday.

Banks deposited 136.29 billion rupees in central bank’s excess liquidity window on Monday.

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

Sri Lanka has sold 35 billion rupees in 2023 and 2028 bonds after offering 50 billion rupees at a bond auction today.

A bond maturing on 10.08.2021 closed at 7.00/10 percent down from 7.05/15 percent from Monday.

A 2-year bond maturing on 01.10.2022 closed at 7.77/83 percent climbing from 7.70/77 percent at Monday’s close.

A bond maturing on 15.01.2023 closed at 8.02/07 percent up from 7.93/8.00 percent.
A bond maturing on 15.09.2024 closed at 8.50/55 percent on Tuesday down from 8.52/58 percent yesterday.

A bond maturing on 15.10.2027 closed at 8.80/90, down from 8.83/90 percent Monday. (Colombo/May12/2020)

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