Sri Lanka bond yields up, money steady

Dec 12, 2011 (LBO) – Sri Lanka’s money and forex markets were steady but bond yields were slightly up in a thin market Monday, dealers said. Meanwhile Central Bank data showed that foreign investors have bought into bills over the last week, reversing some sales earlier. The Central Bank raised limits for foreign holdings of Treasuries last week.

Overnight Call money was traded around 8.10/35 percent Monday and gilt-backed repurchase deals (repo) traded around 7.40 to 7.50 percent.

Average overnight repo rates which hit 8.25 percent on November 25 started to ease after a repo auction to withdraw excess money was stopped amid defence of a dollar peg that was already draining liquidity from the banking system daily.

The average repo rates fell to 7.51 percent on Friday. In forex markets the rupee continued to be defended at 113.90 levels in the spot market, dealers said.

A bond maturing in March 2015 was quoted at 9.83/90 Monday, up from 9.65/70 levels Friday, dealers said. A less liquid 2015 July bond was quoted around 9.80/90 percent.

A 2013 February bond was quoted wider around 9.15/35 percent dealers said. Liquidity in bond markets have been low after active peg defence started.