COLOMBO, April 27 The Sri Lankan rupee closed
steady on Thursday in dull trade, but local bond yields fell
after the government approved a proposal to double the borrowing
limit on Sri Lanka Development Bonds to $3 billion this year,
The government said on Wednesday it approved the proposal
with an aim to increase dollar liquidity.
Local t-bill yields slipped 9 basis points at a weekly
auction soon after the government announcement.
Rupee forwards were active, with two-week forwards
closing at 153.15/30 per dollar, nearly unchanged from
Wednesday's close of 153.10/30.
"There were a lot of activities in the bond market and the
yields came down by 25 basis points after the announcement on
the SLDB," a currency dealer said, asking not to be named.
The broader market was also waiting for approval from the
International Monetary Fund on disbursement of the third tranche
of a $1.5 billion loan and through a proposed sovereign bond
issue in May, dealers said.
Sri Lanka has seen a rise in foreign inflows into equities
and government securities since early this month, with foreign
investors buying shares worth a net 13.1 billion rupees in 25
consecutive sessions through Thursday.
Foreign investors have also net bought government securities
worth 4.17 billion rupees in the week ended April 19, although
they have net sold 58 billion rupees worth of government bonds
so far this year.
(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)