Secondary bond markets continue to remain dismal

Friday, 13 February 2015 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The dull sentiment in secondary bond markets continued yesterday as well as yields were seen closing the day broadly steady with a limited amount of activity witnessed on the seven year maturity of 1 July 2022 within a thin range of 7.70% to 7.72%. However, selling interest on secondary market bills continued for a second consecutive day as July and November bills were seen changing hands within the range of 6.05% to 6.10% and 6.20% to 6.25% respectively. In money markets, the Open Market Operations (OMO) department of Central Bank was seen conducting a repo auction for the first time in four days yesterday as it drained out an amount of Rs. 15.65 billion for a period of 77 days at a weighted average of 6.00% in line with the short term OMO maturities of Rs. 59 billion due today. Overnight call money and Repo rates continued to remain high yesterday to average 6.49% and 6.24% respectively but are expected to ease today following the OMO term maturities returning back to the system. Surplus liquidity increased once again to Rs. 13.69 billion yesterday. Rupee stagnant for fourth consecutive day The spot and spot next contracts were seen closing steadily at levels of 132.80/00 and 132.82/00 respectively as markets remained inactive. The total USD/LKR traded volume for 11 February was at $ 22.08 million. Some of the forward USD/LKR rates that prevailed in the market were one month – 133.40; three months – 134.60; and six months – 135.90.

Rupee steady on moral suasion; seen under pressure

Reuters: The rupee ended steady for a fourth straight session on Thursday as the Central Bank prevented any fall amid importer dollar demand, though the market expects the downward pressure to persist until inflows come in, dealers said. The spot currency ended steady at 132.80/133.00 per dollar. On Friday, the Central Bank lowered the spot rate to 132.80 from 132.20 amid depreciation pressure and since then the rupee has been maintained at 132.80. Finance Minister Ravi Karunanayake said on Monday the rupee will be held steady at current levels and “there won’t be any devaluation at all”. “Banks are plus in dollars, but they are not willing to sell them,” a currency dealer said on condition of anonymity. “Everybody expects the rupee to depreciate. So nobody, including exporters, are selling dollars. This trend will continue until the country gets huge inflows. Karunanayake told Reuters on Monday that Sri Lanka would sell up to $1.5 billion sovereign bonds in the international market soon and expects maximum possible borrowing from the International Monetary Fund (IMF). A Central Bank team led by its Governor Arjuna Mahendran is in Washington for talks with the IMF, Government sources told Reuters. One-month forwards traded at the administered rate of 133.44 per dollar, while most of the other forwards ceased trading for the fourth straight session after the Central Bank narrowed the per day premium to two cents on Monday from Friday’s five cents, dealers said.