Secondary bond market quiet; yields edge up further

• Secondary market bills see demand
• Rupee appreciates marginally

By Wealth Trust Securities 

The secondary bond market yesterday saw yields edge up albeit on thin transaction volumes and sparse activity as market participants were seen taking a wait-and-see approach amidst the prevailing uncertainty stemming from the upcoming election.

Accordingly, only selected maturities were seen trading. The 15.12.27 maturity was observed changing hands at the rate of 12.20%. The 15.02.28, 01.07.28 and 15.12.28 at the rates of 12.60%, 12.90% and 13.00%-13.01% respectively.

In contrast, the secondary bill market was moderately active. Shorter tenor bills maturing in September were seen changing hands at the rate of 9.10%. Similarly, December 2024 (approximately three months) March 2025 (approximately six months) were seen trading at the rates of 9.60% to 9.70% and 9.95% on the back of sizeable volumes.

The total secondary market Treasury bond/bill transacted volume for 4 September was Rs. 62.05 billion.

In money markets, the weighted average rate on overnight call money was at 8.53% and repo was at 8.72%.

The net liquidity surplus stood at Rs. 88.86 billion yesterday as an amount of Rs. 108.86 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.25%.

Further, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 20.00 billion at a weighted average rate of 8.50%.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts appreciated marginally to close the day at Rs. 298.80/298.90 against its previous day’s closing level of Rs. 298.90/299.00.

The total USD/LKR traded volume for 4 September was $ 48.03 million.

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