Sri Lanka’s rupee appreciated against the US dollar, trading at 293.70/90 on Friday, compared to 294.00/50 the previous day, while bond yields remained stable, according to dealers.
The rupee has shown a consistent upward trend in recent days, coinciding with a reduction in the central bank’s bill stock. As the exchange rate strengthens, importers are adopting a wait-and-see approach before settling their bills. Market sources indicate that some buyers are holding off on purchases due to fluctuations in the rupee-dollar rate.
Liquidity is also starting to improve following dollar purchases, with reverse repo borrowings decreasing from nearly 60 billion rupees on October 18 to around 18 billion rupees by Thursday. The overnight auction rate for rupee injections fell from 8.56% to 8.26%, the floor rate of the corridor.
Bond yields remained steady, with slight changes noted across various maturities. A bond maturing on December 15, 2026, was quoted at 10.50/60%, slightly up from 10.45/60% the previous day. Meanwhile, the bond maturing on December 15, 2027, saw a decrease to 11.35/45%, down from 11.40/55%. Bonds maturing on February 15, 2028, and September 15, 2029, were quoted at 11.50/60% and 11.90/12.00%, respectively, reflecting minor declines from their previous rates. A bond maturing on May 15, 2030, was quoted at 12.00/00%, down from 12.10/30%.