Secondary market yields increase marginally ahead of policy announcement

By Wealth Trust Securities

Activity in the secondary bond market was seen increasing yesterday as yields edged up ahead of today’s monthly monetary policy announcement due at 6.00 p.m. The Central Bank of Sri Lanka has held policy rates steady at 7.00% and 8.50% for four consecutive months following its July increase by 50 basis points. 

Activity in the secondary market centered on the three bond maturities auctioned earlier in the week as its yields were seen increasing to a daily high of 12.06%, 12.30% and 12.39% against its opening lows of 12.00%, 12.25% and 12.31% on the 01.03.2021, 01.08.2024 and 01.08.2026 maturities respectively. In addition, a limited amount of activity was witnessed on the 01.04.18, 15.09.19, 01.08.21 and the two 2025’s (i.e. 15.03.25 & 01.08.25) maturities at levels of 10.88%, 11.63%, 12.10% to 12.12% and 12.36% to 12.40% respectively.  

In money markets, the Open Market Operations (OMO) Department of the Central Bank drained out an amount of Rs. 32.7 billion on an overnight basis at a weighted average of 7.43% by way of a repo auction yesterday as the net surplus liquidity stood at Rs. 49.64 billion. The overnight call money and repo rates averaged 8.42% and 8.70% respectively.

Rupee steady 

in thin trade

In Forex markets yesterday, activity was seen shifting to the one-month forward yesterday within the range of Rs 150.78 to Rs 150.82 as trading on the spot, spot next and one week forward was curtailed. 

The total USD/LKR traded volume for 28 November was $ 62.97 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month - 150.75/82; three months - 152.40/55 and six months - 154.75/90.