Secondary bond market yields increase ahead of monetary policy decision

Tuesday, 29 November 2016 00:15 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary market bond yields were seen edging up yesterday, reversing a downward trend witnessed over the past few days, as activity moderated ahead of today’s monetary policy announcement for the month of November, due at 7.30 p.m.

Policy rates have been held steady at 7.00% and 8.50% for three consecutive months since July›s hike of 50 basis points each. The yields of the liquid maturities of 01.09.23 and 01.08.24 were seen increasing to intraday highs of 12.48% and 12.75% respectively against its previous day’s closing levels of 12.35/45 and 12.40/55 while on the short end of the curve, the 15.09.19 and 01.05.20 maturities were seen changing hands at levels of 11.65% to 11.70% and 11.85% respectively.

In the secondary bill market, March, April and September 2017 maturities were traded at 9.30% to 9.40%, 9.50% and 10.25% respectively.

Meanwhile, in money markets, overnight call money and repo rates remained mostly unchanged to average 8.44% and 8.60% respectively with net surplus liquidity increasing further to Rs. 5.26 billion.

Rupee depreciates

In Forex markets, the active spot next contracts were seen dipping to Rs. 149.25/35 against its previous day’s closing level of Rs. 148.95/00 on the back of importer demand. The total USD/LKR traded volume for 25 November was $ 56.04 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 150.10/20; three months - 151.85/95 and six months - 154.40/50.