Sri Lanka govt security yields edge up amid sluggish trade; tax talks weigh

ECONOMYNEXT – Yields in Sri Lanka’s Treasury bonds and bills marginally moved up on Thursday (20) in dull trade as investors took a wait-and-see stance and awaited for some clarity over tte impacts of the tax hikes, dealers said.

Tax hikes, if implemented, are likely to reduce market interest rates because the government will be less depending on the markets for its borrowing, dealers say.

The bond maturing on 01.07.2025 closed at 31.80/32.20 percent, edging up from the previous close of 31.75/32.00 percent.

The bond maturing on 15.07.2029 ended at 30.90/31.05 percent on Thursday, up and wider from the Wednesday’s close of 30.55/31.10 percent.

The bond maturing on 01.07.2032 closed at 29.50/30.00 percent, up from the previous close of 29.30/30.00 percent.

The three month T-bill yield closed at 32.20/32.40 percent, up from Wednesday’s close of 31.75/32.25 percent.

Dealers said the market is moving on a very dull sentiment.

Dealers who were on a wait-and-see approach due to unclear directions regarding the local debt restructuring are further indecisive after proposed tax hikes.

The Central Bank’s guidance peg for interbank transactions remained steady at 363.38 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers between 371.00 and 372.00 for small transactions, data showed. (Colombo/ Oct 20/2022)

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