Bond yields continue to decrease

• RBI cuts repo rate by 25 basis points 

By Wealth Trust Securities

The secondary bond market continued its bull run yesterday with yields decreasing further on the back of considerable buying interest. Activity was witnessed across the yield curve as the liquid maturities of two 2021’s (i.e. 01.08.21 and 15.10.21), 15.03.22, three 2023’s (i.e.15.03.23, 15.05.23 and 15.07.23), 15.03.24, 01.08.26, 15.01.27 and 01.05.29 saw its yields dip to intraday lows of 10.28%, 10.30%, 10.45%, 10.67%, 10.70%, 10.69%, 10.78%, 10.90%, 11.00% and 11.19% respectively against its previous day’s closing levels of 10.35/40, 10.35/43, 10.55/60, 10.75/80, 10.80/85, 10.80/85, 10.88/90, 11.00/05, 11.10/15 and 11.25/30. However, profit taking at these levels curtailed any further downward movement.  

The Reserve Bank of India was seen reducing its repo rate by 25 basis points to 6.00% yesterday.

The total secondary market Treasury bond/bill transacted volumes for 3 April was Rs. 27.72 billion.

In money markets, the overnight call money and repo rates averaged 8.49% and 8.54% respectively as the Open Market Operations (OMO) department of Central Bank of Sri Lanka injected amounts of Rs. 4.00 billion and Rs. 5.50 billion on an seven and eleven days basis at weighted averages of 8.51% and 8.52% respectively. The market liquidity stood at a deficit of Rs. 2.84 billion yesterday.

 Rupee dips marginally

The rupee on its spot contracts were seen depreciating marginally yesterday to close the day at Rs. 174.70/85 against its previous day’s closing levels of Rs. 174.55/75 on the back of buying interest by Banks.

The total USD/LKR traded volume for 3 April was $ 48.15 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 175.65/75; 3 months - 177.50/60 and 6 months - 180.15/45.