Bond yields increase

• Rupee dips
• Money market liquidity improves further

By Wealth Trust Securities

The secondary bond market commenced the week on a negative note with yields increasing across the yield curve. Selling interest during morning hours of trading saw yields on the liquid maturities of 01.08.21, 15.03.24, 15.01.27 and 01.05.29 increase to daily highs of 10.50%, 11.20%, 11.50% and 11.40% respectively. 

However, buying interest from this point onwards led to yields retreating from its daily highs to dip to lows of 10.30%, 10.95%, 11.20% and 11.30% respectively while the 15.03.23 and 15.12.23 maturities were seen changing hands at 10.90% as well. 

The total secondary market Treasury bond/bill transacted volumes for 18 April was Rs. 3.30 billion. 

The money market liquidity continued to improve as the overnight net liquidity reflected a surplus of Rs. 32.25 billion yesterday with call money and repo averaging 8.53% and 8.69% respectively. The OMO (Open Market Operations) Department of the Central Bank of Sri Lanka injected liquidity by way of an overnight and seven-day reverse repo auctions for successful amounts of Rs. 4.42 billion and Rs. 8.50 billion respectively at a weighted average of 8.54%. 

Rupee dips

 The spot rate in the Forex market was seen closing the day lower at Rs. 174.50/70 subsequent to dipping to an intraday low of Rs. 174.90 and against its previous trading days (18 April) closing of Rs. 174.05/25 on the back of buying interest by banks.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month – 175.40/70; 3 Months – 177.35/65 and 6 Months – 180.20/60.