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Yields Move Up

Sep 25, 2010 3:00:20 PM - thesundayleader.lk
  • T. Bill Rates Bottom-Out

With the Monetary Board (MB) keeping policy rates unchanged at Tuesday’s MB meeting, that signalled to the market that an upward trend in rates were plausible, with Treasury (T) Bond yields of 2013, 2014 and 2015 tenures cumulatively moving up by 25 and 10 basis points each (on the two longer tenures) in secondary market trading on Thursday and Friday to 8%, 8.50% and 8.80% respectively.
Regionally interest rates have picked-up with the Reserve Bank of India and central banks in Thailand and Malaysia respectively raising policy rates instead of cutting them.
Expectations are that the shorter tenures will gain in the days to come, market sources said.
They therefore expected yields which were hitherto on a downward trend to pick-up at Wednesday’s primary T Bill auction.
Possibly due to the encashment of an export bill, Friday saw the rupee appreciate by 10-15 Sri Lanka cents in the foreign exchange market, to be commanding rates of Rs. 112/15/20 to the US dollar in two way quotes.
The rumour was that if the dollar dropped to the Rs.112/05 levels that the Central Bank would intervene to protect the greenback from further depreciating, but that didn’t take place, the sources said.
Otherwise the exchange rate was fluctuating between 10-15 Sri Lanka cents band in spot trading, they said. (See also connected story on the same page)