Monday Dec 16, 2024
Monday Dec 16, 2024
Friday, 20 August 2021 02:02 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
The Central Bank of Sri Lanka tightened its monitory policy stance at its announcement yesterday, the first policy change since July 2020. The 50 basis points increase saw the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) advance to 5.00% and 6.00% respectively.
Furthermore, it increased the Statutory Reserve Requirement (SRR) rate applicable for all rupee deposits at Licensed Commercial Banks by 200 basis points to 4.00% from 2.00%, effective 1 September.
This intern led to a steep increase in secondary market bond yields on the back of a sizeable increase in traded volumes. Yields on the liquid maturities of 15.11.23 and 01.12.24 were seen hitting highs of 6.90% and 8.02% respectively against its previous day’s closing levels of 7.35/45 and 7.20/21. In addition, 15.07.23 maturity changed hands at level of 6.43%.
The total secondary market Treasury bond/bill transacted volume for 18 August was Rs. 18.64 billion.
In money markets, the base rate change saw the weighted average rates on overnight call money and repo increase to 5.73% and 5.72% respectively against its previous days 5.09% each. The net liquidity shortage stood Rs. 22.11 billion yesterday with an amount of Rs. 110.05 billion been withdrawn from Central Banks SLFR of 6.00% against an amount of Rs. 87.95 billion deposited at Central Banks SDFR of 5.00%.
USD/LKR
In Forex markets, the overall market continued to remain inactive yesterday.
The total USD/LKR traded volume for 18 August was $ 20.00 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
