Sri Lanka Markets: liquidity at Rs25 Bn; USD/LKR 134.50

Sept 01, 2015 (LBO) – The liquidity surplus in Sri Lanka’s money market was 25 billion rupees on Tuesday compared with 46 billion rupees last week, while the rupee traded at 134.50 against the dollar inching lower from last week’s level.

The central bank was offering 15 billion rupees through its OMO auction on Tuesday to meet bank requirements amid interbank limits on lending.

The central bank’s holding of treasury bills rose to 91.9 billion rupees on Monday up from a low of 69 billion rupees last month, reflecting a higher injection of liquidity into the economy.

Markets were steady after Monday’s Monetary Policy announcement where policy interest rates were held unchanged, a decision largely expected by market participants.

“There was some activity after bond yields picked up around 100 basis points on Monday. There is likelihood of rates going up further,” Kasun Palisena, the chief executive of Perpetual Treasuries, said.

Bond yields rose at the auction on Monday with five year bond yields up 97 basis points to 9.35 percent.

Spot rupee was trading at 134.50 against the dollar, unchanged from Monday’s rate. Palisena said the rupee, which has depreciated 2.3 percent so far this year, was likely to edge lower.

Colombo stocks were up 0.12 percent in early trade.