Bond market at a standstill ahead monetary policy announcement

By Wealth Trust Securities

The activity in the secondary bond market was at a standstill yesterday as a majority of market participants opted to be on the sidelines.

This was ahead of today’s monitory policy announcement due at 7.30 a.m., the second for the year 2022. The Monetary Board of the Central Bank of Sri Lanka, at its announcement on 20 January increased its policy rates by 50 basis points to 5.50% and 6.50% on its Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) respectively.

The total secondary market Treasury bond/bill transacted volume for 02 March 2022 was Rs. 24.90 billion.   

In money markets, the overnight net liquidity deficit was registered at Rs. 592.02 billion yesterday as an amount of Rs. 73.89 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 5.50% against an amount of Rs. 665.91 billion withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 6.50%. The weighted average rates on overnight Call money and REPO stood at 6.49% and 6.50% respectively.

Forex Market 

In the Forex market, limited trades on the USD/LKR spot contracts was seen at levels of Rs. 202.97 to Rs. 202.99 yesterday while the overall market remained inactive.   

The total USD/LKR traded volume for 02 March 2022 was $ 54.50 million.   

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