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Wednesday February 1st, 2023

Sri Lanka’s seondary market moves to dull sentiment following policy meeting

ECONOMYNEXT – Sri Lanka’s secondary market is trading on dull sentiments following the monetary policy meeting that has kept the rates unchanged, dealers said.

At the monetary policy meeting held on Thursday, the Central Bank has decided to keep the rate money that is injected in to the system at 15.50 percent.

Some investors were expecting a rate cut, dealers said.

The central bank governor says that the secondary market rates are stabilising even without bringing the policy rates down. “With that we hope interest rates also to stabilise,” Governor Nandala Weerasinghe said.

On Wednesday, the secondary market was highly active that saw the bond rates easing while T-bill rates moved up in active trade, following the weekly T-bill auction, dealers said.

A bond maturing on 15.01.2028 ended at 30.50/80 percent on Wednesday, down from 30.75/31.00 percent on Tuesday.

A bond maturing on 01.07.2032 closed at 28.00/60 percent on Wednesday, down from 29.00/30 percent.

A bond maturing on 01.07.2025 closed at 30.95/31.10 percent down from 31.00/20 percent from the last close.

A bond maturing on 15.07.2029 closed at 29.00/26 percent, down from 30.00/30 percent.

The three-month T-bills closed at 32.90/33.10 percent up from the previous close of 32.00/30 percent.

The Central Bank’s guidance peg for interbank transactions remained unchanged at 363.50 rupees against the US dollar. (Colombo/Nov24/2022

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Sri Lanka bond yields down at close

ECONOMYNEXT – Sri Lanka’s bond yields were down at close following a bond auction on Wednesday, dealers said while a guidance peg for interbank transactions remained unchanged.

“The rates were steady at the auction,” a dealer said.

“This can be a signal to the market saying the rates will go down in the future.”

A bond maturing on 01.07.2025 closed at 32.40/60 percent, down from yesterday’s 32.60/85 percent.

A bond maturing on 01.05.2027 closed at 29.10/35 marginally down from yesterday’s 29.20/75 percent.

The Central Bank’s guidance peg for interbank US dollar transactions remained unchanged at 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 371.38 rupees on Friday, data showed. (Colombo/Feb 01/2022)

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Sri Lanka bill auction hits pothole after 2025 bond spike

ECONOMYNEXT – Sri Lanka sold only 45 billion rupees in Treasury bills at Wednesday’s auction after offering 120 billion rupees, data from the state debt office showed, amid market confusion over a spike in a two year bond at an earlier action.

30.1 billion rupees of 3-month bills were sold at 29.91 percent, unchanged from a week earlier after offering 60 billion rupees for auction.

5.1 billion rupees of 6-month bills were sold at 28.72 percent, flat after offering 30 billion.

10.3 billion rupees of 12-month bills were sold at 27.72 percent after offering 30 billion.

Phase II subscriptions have been opened.

The market was foxed after the 2025 bonds were accepted at sharply higher yield than market on January 30, dealer said.

There was further confusion as the there was an outright purchase of 2025 at around 29 percent earlier in January.

Some investors speculated that the authorities were trying to drive more buyers towards short end bonds as bill volumes were getting larger. (Colombo/Feb01/2023)

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Sri Lanka services exports down 5.9-pct in 2022

ECONOMYNEXT – Sri Lanka’s services exports were estimated to have fallen 5.9 percent to 1,876.3 million US dollars, the island’s Export Development Board said.

Services exports estimated is made up of ICT/BPM, construction, financial services, transport and logistics.

There are more than 500 ICT companies, the EDB said.

Sri Lanka’s merchandise exports were up 4.6 percent to US dollars 13.1 billion dollars in 2022 from 2021.

Sri Lanka’s goods exports are slowing amid lower growth in Western markets. (Colombo/ Feb 01/2023)

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