Secondary bond market yields hold broadly steady; activity moderate

• Rupee continues upward trajectory

By Wealth Trust Securities

The Secondary bond market yesterday kicked off the new trading week on a relatively subdued note. Yields held mostly unchanged on the back of moderate activity and transaction volumes. Trading was observed on sideways momentum as yields consolidated.

Accordingly, the shorter 2026 tenor maturities of 01.02.26, 01.06.26, 01.08.26 and 15.12.26 were observed trading at the rates of 10.20%, 10.40% to 10.37%, 10.45% and 10.50% to 10.45%, respectively. The 15.12.27 maturity was seen changing hands at the rate of 11.50%. The popular 15.02.28 and the 15.03.28 maturities traded within the range of 11.60% to 11.65% and 11.63% to 11.70% respectively. The 01.07.28 and 15.12.28 maturities traded at the rates of 11.80% and 11.78% respectively. The 15.09.29 maturity was observed trading at the rate of 12.02% and the 15.10.30 maturity traded at the rate of 

12.20% - 12.24%. 

In secondary market bills, December 2024 (close to three months) maturities were observed trading at the rate of 9.40%, while April 2025 maturities (close to six months) changed hands at the rate 

of 9.95%. 

The total secondary market Treasury bond/bill transacted volume for 4 October was Rs. 11.81 billion.

In money markets, the weighted average rates on overnight call money and were 8.61% and 

8.82%, respectively.

The net liquidity surplus stood at Rs. 148.81 billion yesterday as no funds were withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 9.25%, while an amount of Rs. 167.59 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 8.25%. 

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 18.78 billion at the weighted average rate of 8.41%.

Forex Market 

In the Forex market, the USD/LKR on spot contracts continued to appreciate to close the day at Rs. 293.40/293.55 against its previous day’s closing level of Rs. 294.00/294.35.

The total USD/LKR traded volume for 4 October was $ 44.10 million. 

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