Secondary market bond yields continue to decrease

Inflation dips considerably

By Wealth Trust Securities        

Inflation for July reflected a considerable decrease on both the point to point, which was down to 4.8% from the previous month of 6.1%, and the annual average at 5.4%, down from 5.5%.

Meanwhile, the positive momentum in the secondary bond market continued yesterday as well, with yields decreasing further, backed by steady buying interest. Yields of the three 2021’s (i.e. 01.03.21, 01.05.21 and 15.12.21), 15.05.23, 01.08.24, 01.08.26 and 15.06.27 were seen declining to intraday lows of 10.48%, 10.50%, 10.46%, 10.64%, 10.62%, 10.70% and 10.77% respectively, when compared against the previous day’s closing levels of 10.52/60, 10.55/60, 10.58/62 10.70/75, 10.68/74, 10.73/80 and 10.70/80.

The total secondary market Treasury bond transacted volume for 28 July was Rs. 22.99 billion.

In the money market, overnight call money and repo rates remained steady to average 8.74% and 8.75% respectively, with net surplus liquidity standing at Rs. 11.64 billion. The OMO Department of the Central Bank of Sri Lanka drained out an amount of Rs. 0.19 billion at a weighted average of 7.36%, by way of an overnight repo auction.

Rupee appreciates again 

The USD/LKR rate on spot contracts was seen appreciating once again to close the day at Rs. 153.50/55 against its previous day’s closing of Rs. 153.72/78, with export conversions outweighing importer demand.

The total USD/LKR traded volume for 28 July was $ 55 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 154.65/75; three months - 156.50/60 and six months - 159.45/55.