25 July 2024 12:13 am Views - 89
By First Capital Research
The Monetary Policy Board of the Central Bank of Sri Lanka (CBSL), at its meeting held on July 23, 2024, decided to reduce the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) by 25 basis points (bps) to 8.25 percent and 9.25 percent, respectively.
However, the secondary bond market did not reflect the outcome of the policy rate cut and displayed an overall mixed sentiment during yesterday’s trading session. On the short end of the curve, 15.05.2026 and 01.06.2026 closed transactions at 10.20 percent amidst some buying interest.
Similarly, 15.12.2026 closed at 10.40 percent whilst 01.05.2027 traded within the range of 11.50 percent-11.40 percent. However, on the mid end, trading sentiment was mixed with 15.12.2027 hovering between 11.65 percent-11.60 percent. Also on the 2028 maturity, 15.02.2028, 15.03.2028, 01.05.2028 and 01.07.2028 registered activities between 11.70 percent-11.75 percent.
Meanwhile, the CBSL conducted the weekly T-bill auction yesterday and fully accepted the total offered amount of Rs.160.0 billion. The three-month and six-month bills were oversubscribed amidst higher reception and registered an over 40bps decline in weighted average yield rates.
Accordingly, the three-month bill closed at 9.14 percent (-41bps) and the six-month bill closed at 9.34 percent (-44bps). However, the one-year bill only saw a relatively smaller decrease of 12bps, closing at a weighted average yield rate of 9.95 percent. On the external side, the Sri Lankan rupee depreciated against the greenback for the second continuous day closing at Rs.303.9.