Activity moderates; yields increase once again as policy rates unchanged

By Wealth Trust Securities

The Central Bank of Sri Lanka’s Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) or policy rates were held steady at 4.50% and 5.50% respectively at its announcement yesterday.

The activity in the secondary bond market moderated yesterday with yields increasing marginally once again subsequent to the monitory policy announcement. Yields on the most sorted maturities of 2022s (i.e. 15.11.22 and 15.12.22), 15.01.23, 15.12.23, 15.09.24 and 15.08.27 were seen hitting highs of 5.83% each, 5.86%, 6.07%, 6.55% and 7.20% respectively against its previous day’s closing level of 5.70/78, 5.75/78, 5.80/87, 6.00/10, 6.40/45 and 7.10/15. 

In the secondary bill market, February, May, June and November 2021 maturities traded at levels of 4.65% to 4.70%, 4.74%, 4.80% and 5.00% respectively.

The total secondary market Treasury bond/bill transacted volumes for 25 November was Rs. 37.58 billion.   

In the money market, overnight surplus liquidity stood at Rs. 185.04 billion yesterday while call money and repo averaged 4.55% and 4.57% respectively.

Rupee appreciates further

In the Forex market, the USD/LKR rate on spot next contracts was seen appreciating further yesterday to close the day at Rs. 184.85/10 against its previous day’s close of Rs. 185.65/90 on the back of continued selling interest by banks. The total USD/LKR traded volume for 25 November was $ 122.76 million.   

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, money broking companies)