Money market liquidity decreases considerably

• Rupee steady

By Wealth Trust Securities

The overnight net liquidity surplus in the money market was seen decreasing considerably yesterday, as it was recorded at Rs. 107.28 billion against its previous days of Rs. 170.28 billion. An amount of Rs. 151.37 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.5% against an amount of Rs.11.79 billion withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 9.50%.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight and 7-day term reverse repo auction for Rs. 17.30 billion and Rs. 15.00 billion at the weighted average rates of 8.67 and 8.98% respectively. The weighted average rate on overnight call money was at 8.65% and repo was at 8.76%

Meanwhile, activity in the secondary bond market centred on the 2026 maturities as most liquid 15.12.26 maturity was seen changing hands at a low of 9.75% against its previous day closing level of 9.80/90. Similarly, the 01.06.26 and 01.08.26 maturity traded at a low of 9.65% each. Limited trades were also observed on the 15.09.27, 01.05.28, 15.03.31 and 01.10.32 maturities at levels of 10.40%, 10.80%, 11.83% to 11.85% and 11.85% respectively.

In secondary market bills, short term bills maturing in June and July 2024 were seen changing hands within the range of 8.50% to 8.70%. Additionally, August to October 2024 bills were seen trading at 8.60% to 8.85%. Furthermore, November 2024 maturities were seen trading at 8.90%, while May 2025 maturities changed hands at 9.15%. These trades were observed on the back of significant volumes.

The total secondary market Treasury bond/bill transacted volume for 31 May was Rs. 12.39 billion.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day steady at 

Rs. 301.90/302.00 unchanged against its previous day’s closing level.

The total USD/LKR traded volume for 31 May was $ 41.75 million.

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