Sri Lanka bond yields steady, money tighter

Aug 26, 2013 (LBO) – Sri Lanka’s bonds opened flat Monday but money markets were tighter after excess liquidity in the interbank market gradually reduced last week, dealers said. Gilt-backed repos were quoted around 8.40/50 percent about and un-backed call money was quoted at 8.70/80 percent about 10/15 basis points higher than last week, dealers said.

Money markets tightened Friday after excess liquidity ended Friday.

Stock opened flat.

Bond yields were also steady, after rising steadily over the last week.

A 5-year bond maturing on 2018 which was popular among foreign investors was quoted around 11.75/80 percent, Monday after spiking as much as 11.90 percent late last week,.

A 3.5-year bond was quoted around 11.40/55 percent.

The spot-next US dollar was quoted at 132.55/70 percent.

The short liquidity in the market is expected to help the currency, unless the Central Bank permanently injects liquidity to sterilize the cash shortage and boost imports, analysts said.