By Wealth Trust Securities

The bullish sentiment in secondary bond markets continued as buying interest was witnessed across the yield curve. 

The market favourite maturities of 1 May 2020, 1 August 2021, 15 March 2025, 1 June 2026 and 15 May 2030 were seen dipping to intraday lows of 11.35%, 11.43%, 11.99%, 12.05% and 12.40% respectively against its previous day’s closing levels of 11.50/70, 11.65/75, 12.10/13, 12.20/30 and 12.55/59. 

In addition, buying interest on the 2019 maturities saw it change hands within the range of 10.90% to 11.10% while in secondary bill markets, the 182 day bill was quoted at levels of 9.25/40. 

Meanwhile in money markets, the Open Market Operations (OMO) department of Central Bank was seen infusing an amount of Rs.15.00 billion at a weighted average of 8.00% by way of an overnight reverse repo auctioan as the net deficit stood at Rs.16.79 billion yesterday. The overnight call money and repo rates remained mostly unchanged to average at 8.15% and 8.10% respectively. 

Rupee dips further 

Meanwhile in Forex markets yesterday, the USD/LKR rate on the active spot next contract dipped further to close the day at Rs.144.80/20 on the back of continued importer demand. The total USD/LKR traded volume for 6 April was $ 79.65 million. 

Given are some forward USD/LKR rates that prevailed in the market: one month – 145.60/00; three months – 147.40/80; six months – 149.70/10.

Rupee forwards close almost steady

Reuters - Sri Lankan five-day rupee forwards closed almost steady on Thursday as importer dollar demand offset the sale of the greenback by exporters and inward remittances ahead of the Sinhala-Tamil new year next week, dealers said.

The forwards, which are called spot next and act as a proxy for the spot currency, ended at 145.00/145.20 per dollar, compared with Wednesday’s close of 144.90/145.20.

The spot rupee, which has not been active since 27 January, did not actively trade on Thursday. But a state bank sold dollars at 143.90 per dollar for select trades.

The Central Bank has fixed the spot rupee’s trading price at 143.90 through moral suasion, dealers said. Central Bank officials were not available for comment.

“The demand (for dollars) was there, a state bank sold spot next at 144.50 to keep the rupee steady,” a currency dealer said.

Sri Lanka will celebrate the Sinhala-Tamil New Year on 13 and 14 April.

The one-week forwards, which were hovering near record lows last week, also did not actively trade on Wednesday for the fifth straight session, dealers said. The rupee has been under pressure due to foreign investors exiting government securities and amid the country’s economic woes.