Bond yields close steady following a third day of increases

• Policy rates remain unchanged
• Rupee gains to below Rs. 155

 By Wealth Trust Securities

Secondary market bond yields closed broadly steady yesterday following a third day of increases in morning hours of trading. 

The yields of the two 2021’s (01.03.21 and 01.08.21), two 2026’s (i.e. 01.06.26 and 01.08.26) and 15.05.30 maturities were seen increasing to intraday highs of 10.00% each, 10.40%, 10.35% and 10.50% respectively during the morning hours of trading. However, buying interest at these levels saw yields dip from highs to close the day steady against its previous day’s closing levels. 

The Central Bank of Sri Lanka at its first monetary policy announcement for 2018 was seen holding its rates steady at 7.25% and 8.75%. The total secondary market Treasury bond/bill transacted volumes for 14 February was Rs. 7.12 billion. In money markets, the OMO Department of the Central Bank drained out an amount of Rs. 14.12 billion on an overnight basis by way of a repo auction at a weighted average of 7.25% as the net liquidity surplus stood at Rs. 24.39 billion yesterday. The overnight call money and repo rates averaged 8.14% and 7.63% respectively.

Rupee appreciates below Rs. 155 

once again

The rupee on spot contracts survived a day of volatility to appreciate for the first time in three days yesterday to close the day at Rs. 154.80/90 subsequent to dipping to an intraday low of Rs. 155.80 on the back of export conversions and selling interest by banks.

The total USD/LKR traded volume for 14 February was $ 161.10 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 155.55/65; three months - 157.20/40 and six months - 159.60/80.