Bond market kicks off week on a bearish note

Tuesday, 15 September 2026 04:15 - - {{hitsCtrl.values.hits}}

Rupee depreciates

By Wealth Trust Securities

The secondary Bond market kicked off the new trading week yesterday with yields extending their upward trajectory, carrying forward the bearish tone from the previous week.

Yields rose sharply amid continued tensions in the Middle East and persistently elevated global oil prices, fuelling concerns over potential inflationary and external sector pressures. Elevated global Bond yields also weighed on sentiment, amid expectations that the Federal Reserve and the Bank of Japan would maintain a hawkish monetary policy stance.

Despite the bearish sentiment, trading activity and transaction volumes remained robust, supported by the execution of several sizeable block transactions.

The 15.09.29 and 15.12.29 traded higher at yields of 10.70% each. The 01.08.30 traded up the range of 10.90%-11.15%, the 15.10.30 traded higher in the range of 11.10%-11.22%. The 01.12.31 traded up the range of 11.52%-11.62%. The 01.11.33 maturity traded at a yield of 11.85%. The 15.06.34 and 15.09.34 maturities traded at the yield of 12%, the 15.10.34 maturity traded within the range of 11.96%-11.98%. The 15.08.36 traded at 12%, while the 01.07.37 traded in the 12.05%-12.08% range.

In the money market, the net liquidity surplus was recorded at Rs. 131.40 billion. Rs. 58.06 billion was deposited at the Central Bank’s SDFR (Standing Deposit Facility Rate) of 8.25% as against an amount of Rs. 3.16 billion drawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 9.25%

In addition, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka absorbed Rs. 76.50 billion in liquidity through a series of repo auctions. This comprised Rs. 56.50 billion via an overnight repo auction and Rs. 20 billion through a 7-day term repo auction at rates of 8.72% and 8.75% respectively.

The weighted average yields on overnight call money and repos were recorded at 8.88% and 8.96% respectively.

Forex market

The USD/LKR rate on spot contracts was seen closing at Rs. 329.15/329.35 yesterday, with the Rupee depreciating against the USD compared to Rs. 328.60/328.70 recorded on the previous day.

The total USD/LKR traded volume for 11 September amounted to $ 86.23 million.

(References: Public Debt Management Office - Finance Ministry, Central Bank of Sri Lanka, Bloomberg E-Bond Trading Platform, Money Broking Companies)