Secondary market bond yields increase after no revision in policy rates

Friday, 23 October 2020 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The Central Bank of Sri Lanka was seen holding its policy rates steady at 4.50% and 5.50% at its Monitory policy announcement yesterday. The secondary market bond yields were seen increasing right after the policy announcement at the start of the trading day.

Activity mainly centred on the liquid maturities of 2022’s (i.e. 15.11.22 and 15.12.22), 15.09.24, 2026’s (i.e. 01.02.26 and 01.08.26), 15.10.27 & 01.07.28 with its yields increasing to intraday highs of 5.60% each, 6.10%, 6.68%, 6.75%, 6.92% and 7.15% respectively against its previous day’s closing level of 5.35/50, 5.40/50, 5.95/03, 6.45/53, 6.50/60, 6.78/88 and 6.90/05.

Nevertheless, renewed buying interest at these levels curtailed the upward movement in yields to close the day marginally lower than its peaks. In secondary bills, 26 February 2021 maturity and 10 September 2021 maturity changed hands at levels of 4.62% and 4.85% respectively.

The total secondary market Treasury bond/bill transacted volumes for 21 October was Rs. 20.95 billion.

In the money market, the overnight surplus liquidity and weighted average rates on overnight call money and repo was registered at Rs. 203.34 billion, 4.53% and 4.54% respectively.

Rupee depreciates marginally

In the Forex market, USD/LKR rate on spot contracts was seen depreciating once again yesterday to close the day at Rs. 184.35/50 against its previous day’s closing level of Rs. 184.20/30 on the back of buying interest by banks.

The total USD/LKR traded volume for 21 October was $ 86.76 million.

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

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