ECONOMYNEXT- Sri Lanka’s rupee closed weaker at 176.80/85 against the US dollar in the spot market on Tuesday while bond yields eased as some political stability showed, dealers said.
The rupee closed on Monday at 176.75/85 against the greenback.
Overnight liquidity in money markets was stable at 12.22 billion rupees.
Dealers said that return of some political stability led to marginal buying interest in the bond market, ending the dull, stable market seen when uncertainty was at the highest.
President Maithripala Sirisena chaired a cabinet meeting on Tuesday after boycotting it last week due to intelligence officers being questioned openly in parliament on lapses leading up to the Easter Sunday terror attack.
Officials gave evidence at the parliamentary select committee as normal on Tuesday.
President Sirisena also received heavy opposition for an attempt to hold general elections before a presidential election is held by end-2019.
Dealers said holding general elections as planned in 2020 instead of bringing it forward also created some certainty.
However, activity in bond markets was moderate, as many investors sought better political directions, while others chose to wait for the bill auction on Wednesday, dealers said.
The short-term 2021 bonds were the most liquid on Tuesday, dealers said.
A bond maturing on 15.10.2021 closed at 9.70/75 percent, easing from 9.75/78 percent at Monday’s close.
A bond maturing on 15.12.2021 closed at 9.74/78 percent, easing from 9.75/80 percent.
A bond maturing on 15.03.2023 closed at 10.10/17 percent, easing from 10.15/20 percent.
A bond maturing on 15.03.2024 closed at 10.25/28 percent on Tuesday, flat from Monday’s close of 10.25/35 percent.
A bond maturing on 01.08.2026 closed at 10.47/52 percent, easing from 10.50/60 percent.
A bond maturing on 15.01.2027 closed at 10.56/59 percent, easing from 10.58/55 percent.
A 10-year bond maturing on 01.05.2029 closed at 10.62/68 percent, up from 10.60/70 percent. (Colombo/Jun18/2019)