Bond market activity dries up; inflation increases further

By Wealth Trust Securities 

The fresh trading week commenced on a dull note yesterday as activity in the secondary bond market moderated. The maturities of 01.08.25 and 15.01.33 changed hands at levels of 11.38% to 11.40% and 12.98% to 13% respectively. 

The Colombo Consumer Price Index (CCPI) or inflation for the month of January increased for a fourth consecutive month to 14.2% on its point-to-point, when compared against its previous month’s figure of 12.1%, while its annual average increased as well to 6.9% from 6%. 

The total secondary market Treasury bond/bill transacted volume for 28 January was Rs. 15.26 billion.   

In money markets, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out an amount of Rs. 60.15 billion by way of an overnight auction at a weighted average rate of 6.49% while an amount Rs. 71.89 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 5.50%. The net liquidity deficit stood at Rs. 464.96 billion yesterday as an amount of Rs. 597 billion was withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 6.50%. The weighted average rates on overnight Call money and REPO was registered at 6.48% and 6.50% respectively. 

USD/LKR   

In the Forex market, the overall market remained inactive yesterday. 

The total USD/LKR traded volume for 28 January was $ 6.50 million.   

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