NCPI increases to 47-month high; bond market muted

Tuesday, 23 November 2021 04:27 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The National Consumer Price Index (NCPI) for the month of October was seen crossing the psychological level of 8% on its point-to-point, to reach a 47-month high of 8.3% at its announcement yesterday, while it registered a 2.1% month-on-month increase. The annual average also increased to 5.7% when compared against its September figure of 5.5%.

Meanwhile activity in the secondary bond market was at a standstill yesterday with a majority of market participants continuing to be on the sidelines. Only the 15.01.27 maturity was traded at a level of 10.80%.

The total secondary market Treasury bond/bill transacted volume for 19 November was Rs. 1.03 billion.

In money markets, the weighted average rates on call money and repo remained mostly unchanged at 5.92% and 5.98% respectively, while an amount of Rs. 326.35 billion was withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 6%.

Furthermore, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out amounts of Rs. 19.75 billion and Rs. 15 billion by way of overnight and seven-day repo auctions at weighted average rates of 5.98% and 5.97% respectively, while an amount of Rs. 68.14 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 6%.

The net liquidity deficit stood at Rs. 223.46 billion yesterday.

USD/LKR

In the Forex market, the USD/LKR rate on spot contracts traded at Rs. 203 while the overall market remained inactive on Wednesday. The total USD/LKR traded volume for 19 November was $ 56 million.

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