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Rupee Falls as USD Bonds Marketed Overseas: Inside Sri Lanka

Treasury Bills and Bonds in Sri Lanka

(Bloomberg) — Sri Lanka’s rupee fell as investors watch marketing of dollar-denominated bonds in overseas markets for the second time since March that would help repay the island nation’s debt and bolster its foreign exchange reserves.

* Sri Lanka may price five- and 10-year bonds Monday, and it has set initial price guidance of 6.6% and 7.8%, respectively for the offerings.

* “After the Easter Sunday attacks, there’s been a weakness in the rupee. But these bond sales will help build more confidence and drive sentiment,” as it draws foreign inflows and helps boost reserves, says Dimantha Mathew, head of research at First Capital in Colombo.

* USD/LKR up 0.1% to 176.80

* The yield on 10% bonds due March 2023 fell 15bps Friday to 9.90%.

* Overseas investors sold a net $0.2m of local equities on Friday, helping take withdrawals this year to $33m: exchange data.

* Sri Lanka’s May national consumer prices rose 3.5% y/y