Positive momentum in bond markets continue

• Inflation increases

By Wealth Trust Securities Ltd

The start of a new trading week saw the positive momentum in the secondary bond market continue as yields dipped marginal. The liquid maturity of 01.06.25 hit an intraday low of 22.60% against its previous day’s closing level of 22.50/75 while the two-way quote on the 01.05.27 maturity dipped as well. In secondary bills, July to August maturities changed hands at level of 20.00% and 22.50% respectively.

In the meantime, the National Consumer Price Index (NCPI) or inflation for the month of April increased for a seventh consecutive month to 33.8% on its point to point, when compared against its previous month’s figures of 21.5% while its annual average increased as well to 13.0% from 10.6%

The total secondary market Treasury bond/bill transacted volume for 20 May was Rs. 5.81 billion.

In money markets, the weighted average rates on overnight call money and REPO were registered at 14.50% each while the net liquidity deficit stood at Rs. 516.84 billion yesterday. An amount of Rs. 197.13 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 13.50% while an amount of Rs. 713.97 billion was withdrawn from Central Banks SLFR (Standard Deposit Facility Rate) of 14.50%.

Forex market

In the Forex market, the middle rate for USD/LKR spot contracts appreciated very marginally to Rs.359.4373 yesterday against its previous day’s Rs. 359.4750.

The total USD/LKR traded volume for 20 May was $ 11.06 million.  

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