Activity dips ahead of monetary policy

By Wealth Trust Securities

Activity in the secondary bond market moderated yesterday with yields moving in opposite directions on certain maturities ahead of today’s monetary policy announcement. 

Selling interest on the 1 May 2020, the two 2021s (1 May 2021 and 1 August 2021) and the 15 May 2030 maturities saw its yields hit intraday highs of 10.52%, 10.70%, 10.75% and 11.60% respectively while buying interest on the 1 October 2022 and 1 September 2023 maturities saw its yields hit intraday lows of 10.95% and 11.00% respectively against its days opening highs of 10.98% and 11.07%.

Meanwhile in money markets, overnight call money and repo rates averaged 6.95% and 6.72% respectively as net surplus liquidity increased marginally to Rs. 14.43 billion yesterday. 

The Open Market Operations (OMO) department of Central Bank was seen infusing liquidity on an overnight basis for a third consecutive day, this time for an amount of Rs 3.00 billion at a weighted average of 6.65%. 

Rupee remains steady

The USD/LKR rate on the active one week forward contract was seen closing the day mostly unchanged at Rs.144.40/45 against its previous day’s closing levels of Rs.144.45/50. 

The total USD/LKR traded volume for 17 February was $ 75.00 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month – 144.90/10; three months – 146.30/50; and six months – 148.37/42.