Feb 14, 2012 (LBO) – Sri Lanka rupee opened weaker around 117.50/80 in the spot market against the US dollar and drifted lower Tuesday dealers said, as the state took corrective measures to cut further borrowings by state energy utilities. The rupee was weakened to around 118.50/80 to the US dollar in the third day after the currency was allowed to float.
In money markets 9.75/80 percent levels and gilt backed repos were around 8.75/85 percent levels, dealers said.
In bond markets yields have edged up and quotes have widened, dealers said.
A 01.03.2014 bond was quoted around 11.30/50 percent up from yesterdays 11.25/35 percent levels, dealers said.
A 01.04.2013 one year bond was quoted around 10.60/80 percent up from 10.55/65 levels.
A 01.08.2015 bond was quoted around 11.75/12.25 percent from yesterday’s 11.70/12.00 percent, dealers said.
However buy side volumes are low and quotes were tentative and only for small volumes they said.
Sri Lanka’s rupee peg came under pressure from mid 2011 due to high credit growth and lower than necessary interest rates. Borrowings by state energy utilities also increases as rains failed and oil prices also edged, up.
The state has since increased fuel prices and power tariffs are also expected to go up.