Inflation ( CCPI)1.5% (April 2024)
GDP4.5% (4Q 2023)
Unemployment4.3% (4Q 2023)
3M T-Bill Rate8.76%
12M T-Bill Rate9.29%
2Y T-Bond Rate10.00%/ 10.05%
4Y T-Bond Rate10.70% / 10.80%
USD/LKR299/300
Reserves $5.438Bn (April 2024)
Cum. Trade Deficit $1,229 Mn (March 2024 cumulative)
Cum. Fiscal DeficitLKR 2,320 Bn (Dec 2023)

T-Bill rates jumped by 0.27% to 0.50% across all the maturities, up for the second consecutive week

Interest RatesAug 29, 2023
T-Bill rates jumped by 0.27% to 0.50% across all the maturities, up for the second consecutive week

The effort to bring down the government’s cost of finance has yet to be achieved. But yields are expected to follow a downward trend in the long Interest rate structure passing through a vulnerable period after the completion of the first DDR postponed for the third time. CBSL failed to collect the target funds of LKR 150Bn in the first phase of the auction and only managed to sell LKR 108Bn.

The government’s fiscal deficit is growing. Limiting external finance pushes more weight on domestic finance ( T-bills and T-Bond).

The effort of pulling down the government’s cost of finance has yet to succeed. With inflation dropping further by the end of August G-sec yields are expected to follow a downward trend in months to come.

Disclaimer

Charts represents an assessment of the market environment as of the date indicated and it is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

The information presented does not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy or investment decision. This document contains general information only and does not take into account an individual’s financial circumstances. An assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decisions.