Market interest rates further decline
In line with the gradual easing of the monetary policy stance by the
Central Bank, interest rates have been on a declining trend since the
beginning of this year, said Central Bank media release.
This was bolstered by improved market confidence and investor
sentiment with the ending of the conflict, which resulted in an inflow
of foreign investment to government securities. This trend was
underscored by the new developments in relation to the financing
facility by the IMF, media release said.
Accordingly, yield rates on Treasury bills declined sharply at the
Treasury bill auction held on July 22 reflecting market confidence and
positive sentiment. The yield rate on Treasury Bills with a maturity of
91 days declined by 26 basis points to 10.79 per cent, the lowest since
early October 2006. This trend was reflected in the yield rates of
Treasury Bills with the maturities of 182 days and 364 days.
A similar trend was observed in the yield rates of Treasury Bonds in
the secondary market as well. The total reduction in Treasury Bills thus
far during the year is in the range of 654-699 basis points.
The average weighted call money rate has also continued to be within
the policy rate corridor at a single digit level benefiting from a
healthy liquidity position maintained in the market. The present levels
of call money rates are the lowest observed since the first quarter of
2006, media release said .