By Wealth Trust Securities

Secondary market bond yields increased yesterday as selling interest was witnessed on the maturities of 1 May 2020, 1 August 2021 and 1 September 2023 to hit intraday highs of 8.80%, 9.00% and 9.20% respectively in comparison to its previous day’s closing levels of  8.65/75, 8.85/95 and 9.10/20. 

In addition, the two-way quotes on the maturities of 15.09.19 and 01.10.22 were seen edging up to levels of 8.60/70 and 9.20/30 respectively. However, continued demand for long dated maturities, saw the 1 September 2028 and 15 March 2035 change hands within the range of 9.35% to 9.45% and 9.75% to 9.85% respectively once again. 

This was ahead of today’s Treasury bill auction, at where a total amount of Rs.15 billion will be on offer consists of Rs.6 billion on the 182 day maturity and Rs.9 billion on the 364 day maturity. The 91 day maturity will not be on offer for a second consecutive week. At last week’s auction, the weighted average on the 364 day maturity declined by six basis points to go below the psychological level of 7.00% for the first time in eleven weeks while all bids for the 182 day bill were rejected. 

In money markets, overnight call money and repo rates remained low to average at 6.31% and 6.05% respectively as surplus liquidity remained high at Rs. 140 billion.

Depreciating trend continues

The rupee rate on spot contracts lost ground further yesterday to hit a fresh low of Rs.142.45 before closing marginally higher at Rs.142.35/50 in comparison to its previous day’s closing levels of Rs.142.20/30 on the back of continued importer demand. The total USD/LKR traded volume for 16 November 2015 was $ 129.30 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month – 142.65/75; three months – 143.45/55; and six months – 144.65/90.

Rupee near record low on importer dollar demand

(Reuters): The Sri Lankan rupee ended weaker on Monday, not far from an all-time low hit in the previous session, on importer dollar demand, while a private bank’s greenback sales prevented further fall in the local currency, dealers said.

The rupee ended down at 142.20/30 per dollar from Friday’s close of 142.00/05.

The currency fell 0.25 per cent on Friday to a record low of 142.25, though the central bank prevented it from falling further by restricting trades below 142.00 per dollar, dealers said.

Dealers said the central bank on Monday prevented the currency from falling further by restricting trades below 142.20 per dollar. Central Bank officials were not available for comments.

“The rupee is weaker on lack of supply. Exporters are reluctant to sell as they expect the currency to weaken further and they are waiting to see what the central bank’s move is,” said a currency dealer asking not to be named.

Dealers said importers have been booking forwards as they are not sure of the budget while exporters are quietly selling in low volumes on expectations the currency will trade around the current levels until some clarity emerges from the 2016 budget.

Finance Minister Ravi Karunanayake will present the 2016 budget in parliament on Friday. He has said the budget will be “capital oriented.”

Commercial banks parked Rs. 143.87 billion ($1.01 billion) of surplus liquidity on Monday, using the central bank’s deposit facility at 6 per cent, official data showed.