Yields inch up in secondary bond market

Friday, 1 November 2024 00:04 - - {{hitsCtrl.values.hits}}

CCPI records deflation of 0.8% in October
Rupee appreciates

By Wealth Trust Securities

The secondary bond market on Wednesday, saw yields edge up, albeit marginally. The market activity was subdued and transaction volumes were observed at moderate levels.

The 15.01.27 maturity traded at the elevated level of 10.80%. The relatively longer 2027 tenor 01.05.27 and 15.09.27 maturities saw yields edge up to trade at 11.44% and 11.53% respectively. The 01.07.28 and 15.12.28 traded at the rate of 11.82% and up the range of 11.90%-12.00% respectively.

On the inflation front, the Colombo Consumer Price Index – CCPI (Base: 2021=100) for the month of October 2024 was recorded at - 0.80% on a year-on-year basis as against - 0.50% recorded in September 2024. This undershot the Central Bank of Sri Lanka’s target of 5.00%, as it has since March. The drop was primarily driven by lower prices in the housing category and the Government’s reduction in petrol prices.

The total secondary market Treasury bond/bill transacted volume for 23 October was

Rs. 38.93 billion.

In money markets, the weighted average rate on overnight call money was at 8.53% and repo was at 8.67%.

The DOD (Domestic Operations Department) of the Central Bank injected liquidity by way of an overnight reverse repo auctions for Rs. 30.00 billion at the weighted average rate of 8.50%.

The net liquidity surplus stood at Rs. 179.46 billion on Wednesday. An amount of Rs. 5.27 billion

was drawn from the Central Bank’s SLFR (Standing Lending Facility Rate) as an amount of Rs. 214.73 billion was deposited at Central Banks SDFR (Standing Deposit Facility Rate) of 8.25%.

Forex market

In the Forex market, the USD/LKR rate on spot contracts appreciated to close trading on Wednesday at Rs. 293.00/293.20 against its previous day’s closing level of

Rs. 293.70/293.75. The total USD/LKR traded volume for 29 October was $ 74.95 million.

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

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