Secondary market bond yields dip marginally in thin trade

Tuesday, 7 July 2015 01:40 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market witnessed a day of thin trading yesterday as buying interest on the 01.09.2023 and 15.03.2025 maturities saw its yields dip marginally to intraday lows of 9.05% and 9.10% respectively.

This led to two-way quotes on the rest of the yield curve to remain muted as well. BUP_DFT_DFT-9-3

Overnight call money and repo rates remained steady to average 6.12% and 5.89% respectively as surplus liquidity in money markets remained at Rs. 67.55 bn yesterday.

Rupee remains steady

In Forex markets, the USD/LKR rate on spot contracts remained steady to close the day at Rs. 133.60. The total USD/LKR traded volume for 3 July 2015 was $ 32.01 million.

Some of the forward dollar rates that prevailed in the market were 3 Months - 135.20/25 and 6 Months - 136.75/90.

Rupee steady; forwards tad weaker

Reuters: The rupee ended steady on Monday in dull trade as a State-run bank sold dollars at 133.60 to keep the currency flat while the forwards ended slightly weaker as importer dollar demand surpassed inward remittances, dealers said.

The State bank, through which the Central Bank usually directs the market, lowered the dollar selling rate on Thursday by 10 cents from the previous session’s close of 133.70.

It remains to be seen whether the Central Bank can sustain the rupee’s appreciating trend as import demand could pick up due to lower interest rates, dealers said, while pressure on the currency could build up as exporters might stop selling dollars until the elections are over.

Three-month forwards ended a tad weaker at 135.35/40 per dollar compared with Friday’s close of 135.30/40, dealers said.

“The forwards ended weaker on importer dollar demand, thanks to some inward remittances it did not fall much,” said a currency dealer.

President Maithripala Sirisena dissolved Parliament on 26 June and scheduled the election for 17 August, in an effort to consolidate power and push through political reforms, ending a months-long deadlock.