Money market liquidity drops sharply to 17-month low; Bond yields edge up

By Wealth Trust Securities

The overnight net surplus liquidity position in the money market was seen diminishing on Tuesday, as it hit a low of Rs. 1.83 billion, a level last seen in February 2020 and against its previous days net surplus of Rs.53.59 billion. A massive amount of Rs. 96.71 billion was accessed from Central Banks SLFR of 5.50%; its highest since 28 January 2019. The deposited amount at Central Banks SLDR of 4.50% decreased to an amount of Rs. 98.53 billion, while the weighted average rates on overnight call money and repo increased to 5.05% and 5.04%, respectively. 

Selling interest in the secondary bond market saw yields on the liquid maturities of 15.11.23 and 01.12.24 increase to hit intraday highs of 6.36% and 6.77% respectively against its previous trading day’s closing levels of 6.25/28 and 6.70/75. In addition, 15.09.24 maturity changed hands at a level of 6.65% while the 10 September 2021 bill maturity traded at a level of 5.20% in the secondary bill market. 

The total secondary market Treasury bond/bill transacted volume for 19 July was Rs. 42.28 billion.   

USD/LKR   

In Forex markets, the overall market continued to remain inactive yesterday. The total USD/LKR traded volume for 19 July was $ 25.10 million.   

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