Bond market remains sluggish; policy rates held steady

By Wealth Trust Securities

The secondary bond market remained dull despite the Central Bank of Sri Lanka holding its policy rates steady at 14.50% and 15.50% on its Standing Deposit Facility Rate (SLDR) and Standing Lending Facility Rate (SLFR) respectively at its sixth monetary policy announcement yesterday.

In limited trades, the 01.06.2025 maturity changed hands within the range of 27.80% to 28.00% in the secondary bond market while in secondary bills, February, July and August 2023 maturities traded at levels of 28.75% to 29.00%.

The total secondary market Treasury bond/bill transacted volume for 17 August 2022 was Rs. 35.21 billion. In money markets, the net liquidity deficit stood at Rs. 456.21 billion yesterday as amount of Rs. 286.93 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 14.50% against an amount of Rs. 743.14 billion withdrawn from Central Bank’s SLFR (Standard Deposit Facility Rate) of 15.50%. The weighted average rate on overnight call money and REPO stood at 15.50% each.

Forex market 

In the forex market, the middle rate for USD/LKR spot contracts dipped marginally once again to Rs. 360.9733 yesterday against its previous day’s closing level of Rs. 360.96.

The total USD/LKR traded volume for 17 August 2022 was $ 24.41 million. 

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