Sri Lanka bond market dull after FinMin statement on local debt restructuringSri Lanka T-bond yields edge down; rupee peg steady Sri Lanka issues statement after virtual meeting with official creditorsCrisis-hit Sri Lanka reveals foreign debt details; owes $35 bln in total, $7 bln to China | Sinhala News

Sri lanka News – Sri Lanka secondary market remained dull on Wednesday following a Ministry of Finance statement that said domestic debt being included in the perimeter of an International Monetary Fund debt analysis, dealers said.

“This means the liquidity conditions are going to be tighten and might strain the profitability of local banks,” a dealer told EconomyNext.

A bond maturing on 15.01.2028 ended at 32.75/33.30 percent on Wednesday steady from 33.00/30 percent on Tuesday.

Dealers said no other bonds were quoted for the day.

Three-months T-bill yield closed at 32.00/30 percent, hardly changed from the previous close of 32.00/32.60 percent.

Sri Lanka’s bond market was facing uncertainty over re-structuring and investors are also waiting the 2023 budget, which is scheduled to be presented to the parliament on November 14.

An IMF debt sustainability analysis has determined that Sri Lanka’s debt is unsustainable.

“…[I]n the case of Sri Lanka the perimeter of the IMF DSA includes all public and publicly guaranteed (“PPG”) debt, i.e., external debt (including USD denominated instruments issued under local law), domestic debt (the service of which represents a significant share of our Gross Financing Needs) and SOEs’ debt,” the statement said.

“For this reason, we shall not a priori exclude any particular category of debt from our debt treatment strategy, except as would be seen customary in such exercise.

The Central Bank’s guidance peg for interbank transactions remained unchanged at 363.30 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers between 371.90 and 372.00 for small transactions, data showed. (Colombo/ Nov 02/2022)

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