Limited activity ahead of monetary policy decision

By First Capital Research

The secondary market yield curve witnessed a day of limited activity as dull sentiment persisted. Investors adopted a wait-and-see approach ahead of the release of the monetary policy decision scheduled for January 29, 2025 and the treasury bill auction to be held on January 29, 2025, where the Central Bank is scheduled to raise Rs.182.5 billion in T-bills. Amongst the traded maturities notable trades were amongst the 2027, 2028, 2029 and 2030 maturities. On the short end of the curve, 15.05.27 and 01.09.27 traded at rates of 9.75 percent and 9.85 percent, respectively. On the belly end of the curve, 15.02.28 and 15.03.28 traded at rates of 10.15 percent and 10.18 percent, respectively. Similarly, 01.07.29 and 15.09.29 traded at rates of 10.90 percent and 10.85 percent, respectively. The 15.10.30 and 01.03.31 maturities traded at 11.33 percent and 11.35 percent, respectively. On the external front, the Sri Lankan rupee appreciated against the US dollar, closing at Rs.298.4/US dollar, compared to Rs.298.9/US dollar recorded the previous day. The Central Bank holdings of government securities remained unchanged, closing at Rs.2,511.92 billion yesterday. Overnight liquidity in the banking system expanded to Rs.169.55 billion, from Rs.139.99 billion recorded the previous day.