Sri Lanka T-bond yield up; local debt restructuring uncertainty weighs

ECONOMYNEXT – Yields in Sri Lanka’s Treasury bonds rose on Thursday (29) while treasury bills remained unquoted after a weekly bond auction amid speculation over local debt restructuring, dealers said.

The secondary market remained dull with no proper direction on local debt restructuring being published yet, they said

During the initial staff level discussion with the International Monetary Fund, Sri Lanka said there are no plans to restructure debt and the discussions are to restructure foreign debt.

However early in August this year, President Ranil Wickremesinghe said debt advisors are looking at local debt as a re-structuring plan to negotiate with creditors was being developed as part of efforts to make the debt sustainable.

However, the Central Bank has not given any direction about the local debt and has said the government’s position on debt restructuring is as declared in April 2022, where there is no restructuring of rupee debt.

A bond maturing on 01.07.2032 ended at 29.80/30.00 percent on Thursday, up from 29.55/75 percent in the previous close.

Sri Lanka’s central bank’s guidance peg for interbank transactions on Thursday was 362.90 rupees against the US dollar, unchanged.

Data said that commercial banks offered dollars for telegraphic transfers between 369.90 and 370.00 for small transactions.

Banks offered to buy inward remittances at 359.90 -360.00 rupees. (Colombo/Sept29/2022)

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