Exchange rates – (Week ended May 6, 2020)

 In the Forex market, the USD/LKR rate on spot contracts appreciated during the week to trade within the range of Rs.187.20 to Rs.191.00 against its previous weeks closing of Rs.192.00 to Rs.192.80 on the back of selling interest by banks. 

The daily USD/LKR average traded volume for the first two days of the week stood at US $ 58.05 million. 

Government Securities Market

The secondary Bond market remained active during the shortened trading week ending 06th May 2020 while trading within a narrow range across the yield curve. The continuous selling interest  on the liquid maturities of 2024’s (i.e.15.03.24, 15.06.24 and 15.09.24), 01.05.25 and 15.10.27 saw its yields increase to weekly highs of 8.70%, 8.75% each, 8.85% and 9.07% respectively in comparison to its previous weeks closing levels of 8.62/70, 8.65/75, 8.67/73, 8.80/88 and 8.95/02.

However, buying interest at these levels curtailed any further upward movement in yields. In addition, maturities of 01.10.22, 15.01.23 and 01.08.26 were traded at levels of 8.00% to 8.03%, 8.14% to 8.18% and 9.02% to 9.04% respectively as well. Meanwhile, the weighted average rates on the 91-day and 182-day bills increased by 09 and 10 basis points respectively while the weighted average on the 364 day bill remained steady at 7.00%, at the weekly bill auction. 

The foreign holding in Rupee bonds continued to shrink for a 15th consecutive week, recording an outflow of Rs.0.95 billion for the week ending May 6, 2020. 

 In money markets, the weighted average rates on overnight call money and repo rates averaged 6.41% and 6.55% respectively for the week as the overall liquidity surplus stood at Rs.94.83 billion by the end of the week. The DOD (Domestic Operations Department) of the Central Bank injected liquidity during the week by way of 7 day reverse repo auctions at weighted average  yields of 6.50% and 6.93% respectively for commercial Banks and Standalone Primary  Dealers . 

References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies