Sri Lanka’s rupee was quoted at 335.50/336.00 to the US dollar in the spot market on Friday, firmer than 336.00/337.00 the previous day, dealers said, as bond yields rallied across the curve on optimism around a US-Iran deal.
Activity in the secondary market increased, with bonds trading significantly lower in yield. A bond maturing on July 1, 2028 was quoted at 11.40/70 percent, down from 11.75/85 percent. The December 15, 2029 bond was at 11.90/12.05 percent (down from 12.00/15), October 15, 2030 at 12.00/15 (down from 12.15/35), December 15, 2032 at 12.50/65 (down from 12.50/13.00), and March 15, 2035 at 12.80/13.00 percent (down from 13.00/30).
The telegraphic transfer rate for the rupee against the US dollar was 331.65 buying / 340.65 selling. Against the euro the rupee was at 381.2123 selling / 395.1293 buying, and against the pound sterling at 443.7520 buying / 457.7976 selling.
Friday’s move reverses Thursday’s spot close at 336.00/337.00, itself a step back from the CBSL-driven 332.25/75 rate on Tuesday that had emerged after Governor Nandalal Weerasinghe’s briefing to Parliament’s Committee on Public Finance.
The rally tracks Wall Street commentary after President Trump told reporters at the Oval Office that the US-Iran deal had been agreed and may be signed over the weekend. Bond markets are pricing in a sharp narrowing of the war-risk premium that has weighed on Sri Lanka’s fuel-import bill and rupee since the Middle East conflict escalated in February. The CBSL’s supplementary issuance of Rs3.51 billion Treasury bills on tap the same morning closed at lower average yields, mirroring the secondary-market rally.
Source: EconomyNext.
