Sri Lanka rupee stronger, bond yields fall amid liquidity shortage

ECONOMYNEXT – Sri Lanka’s rupee strengthened 145.50/70 to the US dollar in the one week forward market with foreign bond buyers selling dollars and gilt yields fell, dealers said, though expanding liquidity shortages pointed to central bank dollar sales.

The one week rupee closed at 146.00/20 on Thursday.

There is not spot market has been halted by moral suasion. Meanwhile rising liquidity shortages indicated that the central bank was still intervening for transactions.

Liquidity shortages rose to 48 billion rupees on Thursday and the central bank’s Treasury bill stock rose to 299 billion rupees from 286 billion rupees as the cental bank pumped 45 billion rupees through an overnight cash auction.

Later this month a 500 million dollar syndicated loan is expected to be wrapped up.

A selection of bond yields are given below:-

2-year bonds (15.11.2018) quoted at 11.18/25 down from 11.00 down from 11.40/50 on Monday.

3-year bond (01.05.2019) quoted 11.55/60 down from 11.55/75 on Monday

5-year bonds (01.03.2021) quoted at 11.75/11.85 from 11.85/12.00 percent

7-year bonds (01.10.2022) quoted at 11.90/97 from 12.00/15 percent

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7-year bonds (01.09.2024) quoted at 11.10/20 from 11.25/45 percent

8-year bonds (01.01.2024) quoted at 12.25/35 from 12.60/65 percent

10-year bonds (01.06.2026) quoted at 12.42/49 from 12.78/85 percent

14-year bond (15.05.2030) quoted at 12.60/12.80 from 12.80/13.00 percent Monday. (Colombo/July08/2016)

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