Bond yields edge up marginally ahead of monetary policy announcement

By Wealth Trust Securities

The secondary market bond yields were seen increasing marginally yesterday at the start of a fresh trading week, due to selling interest on the back of moderate activity. 

The liquid maturities of 2022s (i.e. 15.11.22 and 15.12.22), 01.10.23 and 2024s (i.e. 15.09.24 and 01.12.24) were seen hitting intraday highs of 5.40%, 5.43%, 5.68%, 6.28% and 6.30% respectively against its previous day’s closing level of 5.32/38, 5.35/40, 5.62/70, 6.20/25 and 6.25/32. 

In addition, maturities of 15.07.23, 01.05.25 and 01.02.26 changed hands at levels of 5.65%, 6.44% and 6.65% respectively as well.

This was ahead of today’s monetary policy announcement, the first for the year 2021, due at 7:30 a.m. The Central Bank of Sri Lanka kept policy rates unchanged at its previous announcement on 26 November 2020.

The total secondary market Treasury bond/bill transacted volumes for 15 January was Rs. 5.34 billion.   

In the money market, weighted average rates on overnight call money and repo remained mostly unchanged to average 4.55% and 4.56% respectively while overnight surplus liquidity stood at Rs. 213.91 billion yesterday.

Rupee loses marginally  

In the Forex market, the USD/LKR rate on the more active spot next contracts was seen depreciating marginally yesterday to close the day at Rs. 194.50/195.50 against its previous day’s closing level of Rs. 193.00/195.00 on the back of buying interest by banks. The more demanded spot contracts traded at levels of Rs. 193.50 to Rs. 194.

The total USD/LKR traded volume for 15 January was $ 69.91 million.   

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, money broking companies)