Secondary Bond market rallies; yields nose-dive; Rupee dips

Tuesday, 18 March 2025 00:45 - - {{hitsCtrl.values.hits}}

By WealthTrust Securities

The Secondary Bond market yesterday kicked off the week on a bullish note with aggressive buying interest pushing yields down further, carrying over from last week’s rally. Market activity and transaction volumes were seen at robust levels, as strong demand was observed particularly on tenors from 2028 onwards. This was supported by increased overnight market liquidity as well as a reduction in call money rates and repo rates.

In addition, it was reported that Bloomberg Economics projected Sri Lanka’s GDP grew by 5.20% during the year 2024 amidst a low inflation environment.

Accordingly, the yield on the 01.07.28 and 01.09.28 maturities declined from intraday highs to lows of 10.10%-9.99% and 10.08%-10.00%, respectively. The 15.10.28 and 15.12.28 maturities were seen trading down the ranges of 10.10-10.00% and 10.25%-10.08%, respectively. The 15.09.29 maturity was seen trading down the range of 10.48%-10.42%, while the yield on the 15.12.29 maturity was seen declining down the range of 10.55%-10.45%. For reference, the 15.12.29 maturity was issued at auction just last week (on Wednesday, 12 March) at the weighted average rate of 10.72%. The rate of the 15.10.30 maturity was seen trading down from an intraday high to a low 10.70%-10.65%. Similarly, the 15.12.32 and 01.09.34 maturities traded down the ranges of 11.35%-11.10% and 11.42%-11.36%, respectively.

As a result, the yield curve was observed notching down further as two-way quotes closed the day down relatively steeply.

The total secondary market Treasury bond/bill transacted volume for 14 March was Rs. 21.64 billion.

In the money market, the net liquidity surplus stood at Rs. 181.72 billion yesterday. Rs. 0.12 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 181.84 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 7.50%.

The weighted average rates on call money and repo were registered at 7.96% and 7.98%, respectively.

Forex market

In the Forex market, the USD/LKR rate on spot contracts closed the day depreciating to Rs. 296.30/296.45 as against Rs. 295.50/296.00 the previous day.

The total USD/LKR traded volume for 14 March was $ 64.85 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.