Secondary bond market yields hold steady; activity subdued

• Rupee depreciates

The Secondary bond market yields were seen holding broadly steady on the back of subdued activity at the start of its trading week yesterday. Accordingly, trades were observed on the 01.02.26, 15.05.26 and 15.12.26 maturities at the rates of 10.50%, 11.20% and 11.10% respectively. The 15.09.27 maturity was observed trading at the rate of 11.90%, while the yield on the 01.07.28 maturity was observed moving up from 12.50% to 12.60%. The 15.06.29 maturity was seen holding at its previous low of 12.70%.

In contrast, activity and volumes in the secondary bill market was high. November 2024 (close to 3 months), February 2025 (close to 6 months) and June 2025 maturities were seen trading at the rates of 9.60%, 9.90% to 9.95% and 10.00% respectively.

The total secondary market Treasury bond/bill transacted volume for 23 August was Rs. 7.90 billion.

In money markets, the weighted average rate on overnight call money was at 8.57% and repo was at 8.70%.

The net liquidity surplus stood at Rs. 98.13 billion yesterday as an amount of Rs. 117.91 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.25% as against an amount of Rs. 0.10 billion withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 9.25%. 

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 19.68 billion at a weighted average rate of 8.52%.

 Forex Market 

In the Forex market, the USD/LKR rate on spot contracts depreciated to close trading yesterday at Rs. 300.80/301.20 against its previous day’s closing level of Rs.299.70/300.00.

The total USD/LKR traded volume for 23 August was $ 54.65 million. 

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