Week opens on a sluggish footing

By First Capital Research

The secondary market opened the week on an unusually sluggish note, with activity remaining extremely limited and the yield curve essentially unchanged. 

Against this static backdrop, the market failed to register any noteworthy transactions.

Following 11 months of consistent deflation, headline inflation turned positive in August, with the CCPI rising 1.2 percent YoY. Both food and non-food categories contributed to the upturn. Despite a monthly decline in prices, inflation is expected to gradually firm toward the 5 percent target, particularly owing to the base effect that is set to take hold from September 25. 

In the forex market, the Sri Lankan rupee appreciated marginally against the greenback, closing at Rs.302.29/US dollar compared to Rs.302.44/US dollar seen previously.  Meanwhile, overnight liquidity in the banking system contracted to Rs.126.4 billion from the previously seen level of Rs.146.5 billion.