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Bond rates has come down 2nd time for the week.

3 posters

Go down  Message [Page 1 of 1]

hariesha


Vice President - Equity Analytics
Vice President - Equity Analytics

This time even long long term bond yields also down.

http://www.lbo.lk/fullstory.php?nid=1853066023

Bond Yields

18 May, 201207:46:04


Sri Lanka bond yields ease

May 18, 2012 (LBO) - Sri Lanka's bond yields edged lower as more money as higher rates drew more money into the market, and short term rates fell below this week's auction prices dealers said.



On Thursday a 3-month Treasury bill which dropped on Wednesday's auction to 11.99 percent from 12.19 a week earlier traded as low as 11.50 percent and closed around 11.40/60 percent, dealers said.
A 2-year bond maturing on March 01, 2012 was quoted around 13.15/30 Thursday, from around 12.30/50 levels a day earlier.

A 3-year bond maturing on July 2015, was quoted around 13.70/80 percent down from 13.75/14.00 percent levels, dealers said.

Sri Lanka's dollar peg came under pressure from the second quarter of 2011 as the Central Bank printed money to keep interest rates low and bought Treasury bills. Credit growth picked up partly due to state manipulation of energy prices.

Sri Lanka got the powers to print money and intervene in Treasury bill markets after a money printing central bank was set up in 1950 leading to chronic depreciation of the peg, periodic severe balance of payments crisis, high inflation and general economic instability.




During the current balance of payments crisis the rupee fell from 110 to 130 to the US dollar.
Analysts have pointed out that if Treasury bill yields are allowed to adjust to credit demand conditions and public debt office does not manipulate Treasuries yields, the currency peg and inflation can be kept stable, giving a foundation for people to grow and emerge from poverty.

aj


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

more money as higher rates drew more money into the market

more demand for getting into safe heavens could lower the rates as more people would grab whatever they can at whatever rate they can get

WildBear


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

There are signs of improvement of Balance of payment, with reduced oil price,low demand for vehicles due to higher tax, weakened rupee discouraged imports and encouraged exports. CPC and CEB will be able to retire their massive debt, and reduce the pressure on rupee.we can expect interest rates to come down further. Now iS the time to grab high yielding long term deposits. As FD rates Will soon follow the market trend.

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