Secondary market bond yields increase marginally  

• CBSL holds policy rates steady 

By Wealth Trust Securities

The secondary bond market yields were seen increasing marginally yesterday on the back of foreign and local selling interest as activity moderated considerably towards the latter part of the day. 

The yields on the 15.05.23 and 01.08.24 maturities were seen increasing to daily highs of 10.40% and 10.51% respectively from its opening lows of 10.35% and 10.45% while maturities of the two 2021’s (i.e. 01.03.21, 15.12.21) and the 15.05.30 continued to change hands within the range of 10.17% to 10.25% and 10.82% to 10.85% respectively. In the secondary bill market, June to August 2018 maturities changed hands within the range of 9.25% to 9.45%.

Meanwhile, the Central Bank of Sri Lanka was seen keeping its policy rates unchanged at 7.25% and 8.75% at its policy meeting held yesterday.

The total secondary market Treasury bond transacted volume for 2 August 2017 was Rs. 20.92 billion.

in money markets, the OMO Department of Central Bank was seen draining out in total an amount of Rs. 10.00 billion by way of two outright sales of Treasury bills at weighted average rates of 8.68% and 8.90% for 35 and 42 days respectively. Net surplus liquidity in the system stood at Rs. 30.84 billion yesterday with a further amount of Rs. 14.5 billion being drained out at a weighted average of 7.35% by way of an overnight repo auction. This writer saw the averages on overnight call money repo rates averaging 8.74% and 8.78% respectively.

Rupee appreciates marginally 

The rupee on its spot contracts was seen appreciating once again yesterday to close the day at Rs. 153.25/40 against its previous day’s closing of Rs. 153.45/55 on the back of exporter conversion outweighing importer demand.

The total USD/LKR traded volume for 2 August was $ 85.60 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month - 154.10/20, three months - 155.50/60 and six months - 158.55/65.