Sri Lanka rupee strengthens 10 cents on intervention

ECOMYNEXT – Sri Lanka’s rupee strengthened to 133.50 to the US dollar as authorities raised the interventions rate by 10 cents, and some bond yields rose ahead of an auction on Tuesday, dealers said.

The rupee is now trading relatively freely in the spot market with authorities selling dollars at the intervention rate.

On Monday the intervention rate was lifted to 133.50, up 10 cents from Thursday, a level last seen on May 19, dealers said.

Foreign investors exited some rupee bonds last week, with total holdings moving down to 401.1 billion rupees on July 29, from 404.0 billion a week earlier.

Excess liquidity in money markets also dropped indicating steady net sales of dollars.

In June nets sales of dollars by the Central Bank hit a high of 491 million dollars, though Treasury dollar surrenders to the Central Bank are not captured in the data.

In bond markets a 4 to 7 year bonds moved up slightly head of a bond auction of Tuesday.

Four year bonds maturing on 01.07.2019 was quoted at 8.21/25 percent up from 8.15/20 on Thursday.

A 6-year bond maturing on 01.08.2021 was quoted at 8.94/96 up from 8.90/93 percent and a 7-year bond maturing on 01.10.2022 was quoted at 9.18/9.25 percent.

On Tuesday the government debt office is offering 25 billion rupee so bonds at an auction made up of 5 billion rupees of 3-year 11-month bonds maturing on 01.07.2019, 5 billion rupees of 6-year 01.08.2021 bonds and 10 billion rupees of 01.08.2025 bonds.

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