Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය

Latest topics

» CIFL ANY NEWS
by Gambino7 Today at 12:13 pm

» Avoid investing in Abans Group company shares
by Wimal Modawansa Today at 10:07 am

» CFT share එක මොනව හරි දෙයක් වෙනව වාගෙ.
by sameboy Yesterday at 6:43 pm

» Beware of banking stocks
by TuTanKaman Yesterday at 7:10 am

» Tea prices up and up.Plantation shares down and down!
by Teller Yesterday at 2:44 am

» CEYLON COLD STORES PLC(CCS.N0000)
by rosa maria Sat Dec 09, 2017 4:48 pm

» BFN .. ORIENT FINANCE PLC
by Teller Fri Dec 08, 2017 10:52 pm

» SDB - AN IMPRESSIVE PERFORMANCE
by samaritan Fri Dec 08, 2017 1:30 pm

» People's Leasing Company
by Teller Fri Dec 08, 2017 10:41 am

» Sri Lanka Exports up 12.9-pct in Sept
by Teller Fri Dec 08, 2017 10:38 am

» DECEMBER DISCOUNT
by Teller Fri Dec 08, 2017 10:30 am

» LLMP - New Strategic Marketing >>> Boooom
by Teller Fri Dec 08, 2017 10:27 am

» Why LLUB.N0000 going down ?
by Teller Fri Dec 08, 2017 10:20 am

» LDEV rights
by Teller Fri Dec 08, 2017 10:16 am

» SAMP Rights Issue
by niru Thu Dec 07, 2017 8:04 pm

» Risk of top 20
by Yahapalanaya Thu Dec 07, 2017 7:56 pm

» Whats happenning with SHL
by Suranga_77 Thu Dec 07, 2017 12:54 pm

» RENUKA CAPITAL PLC (KZOO.N0000)
by Nethu Tue Dec 05, 2017 10:41 am

» ALLI-why so cheap?
by Agape Mon Dec 04, 2017 12:55 pm

» PHAR WITH LAND SALE WHAT WOULD BE THE EPS FOR NEXT QR.
by Eugine Fernando Mon Dec 04, 2017 8:51 am

» CFVF will HIT. 40 BY Next. Thursday
by Ryan Hudson Mon Dec 04, 2017 7:17 am

» best stocks to buy now
by Ryan Hudson Mon Dec 04, 2017 7:16 am

» KZOO - Renuka Capital Excellent Term Report
by The Hunter Sun Dec 03, 2017 10:58 am

» CFVF LOVERS THIS IS FOR YOU..
by Ryan Hudson Fri Dec 01, 2017 2:22 pm

» What about KOTA.R ?
by Neluka Karannagoda Wed Nov 29, 2017 11:38 am

HashFlare

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market News » $ 42 M for debt servicing - Money printing rises to 229% of liquidity

$ 42 M for debt servicing - Money printing rises to 229% of liquidity

View previous topic View next topic Go down  Message [Page 1 of 1]

Melissa Pereira


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
A massive US$ 42.16 million was drawn out from Central Bank's (CB's) foreign reserves yesterday, probably due to government's foreign debt servicing commitments. Foreign debt servicing is executed by CB's reserves and not by the foreign exchange (FX) market for fear that it would cause depreciating pressure on the rupee in the market. CB deals in spot, where settlement takes place after two market days from the date of transaction. So, yesterday's exercise would have been on transactions entered to on Tuesday, where the exchange rate (ER) in interbank spot trading was floating at Rs 137.75 to the US dollar.
Meanwhile, yesterday, the ER sharply weakened by between 15 to 35 Sri Lanka cents (SLc) to Rs 138.95/139.05 to the dollar in two way quotes in interbank spot trading around 3.45 pm yesterday, from the previous day, i.e. Wednesday's close.


CB last Friday free floated the rupee, which has seen it depreciate by between 3.08% to 3.12% (Rs 4.15 to Rs 4.20) since, mainly due to foreign exits from the government securities market and the Colombo stock market. It was last protected by CB a week ago, i.e. last Thursday (3 September) at Rs 134.75, by dipping from CB's foreign reserves at that discounted price to meet the FX market's need for dollars.



As a result of yesterday's action, money market's excess liquidity was depleted by a sum of Rs 5,849.2 million; resulting in money printing, reflected by CB's holdings of Treasury (T) Bills, now wholly due to CB's lending to the government, increasing to 229.09%, from the previous day's figure of 207%.



This is a sign of a dearth of inflows in to the market. Market's excess liquidity yesterday was Rs 54,089 million and CB's book value T-Bill holdings: Rs 123,913.89 million. Nevertheless, the weighted average rates of call money and overnight market repo transactions stagnated at 6.34% and 6.30% respectively.



However, in secondary market trading of T-Bonds, yields of 2019 and 2023 maturities fell by five basis points each to 9.30% and 10% on thin volumes at yesterday's trading, sources said. They attributed these falls to Wednesday's rejection of its T-Bill auction because the market was asking for higher yields than that which the government was prepared to pay.



"We shall have to wait and see what the government's reaction would be at next week's T-Bill auction before reaching a decision as to whether the government is adamant on a low interest rate regime or not," they said. Shorter tenures didn't gain investor attention at yesterday's secondary market trading in treasuries, the sources said.
Courtesy: Ceylon Finance Today 11 September 2015

View previous topic View next topic Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum