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Sunday Nov 01, 2026
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By Wealth Trust Securities
The secondary Bond market yesterday saw yields edge lower across key tenors amid renewed buying interest.
Sentiment was supported by softer crude oil prices amid reports that shipping flows through the Strait of Hormuz had returned to pre-war levels. Brent crude fell to around $ 96 per barrel earlier in the session.
On the domestic front, the CBSL reaffirmed its 5% inflation target. Private sector credit growth also showed signs of moderation, with August credit expansion easing to Rs. 106 billion from Rs. 169 billion in July. YoY credit growth slowed to 24.5%.
Against this backdrop, buying interest remained evident across selected maturities, resulting in a moderate decline in yields. The rest of the yield curve held broadly steady.
Market activity and transaction volumes remained subdued.
The 15.10.28 maturity traded down to 10.55%-10.50%. The 15.12.29 maturity traded at 10.85%. The 15.10.30 maturity traded at 11.20% and the 01.02.31 traded down to 11.27%-11.22%. The 15.12.32 and 15.01.33 maturity traded at 11.70% and 11.76%-11.75% respectively. The 01.11.33 traded at 11.85%. The 15.06.34 and the 15.09.34 maturities traded at 12.05% and 12.00% respectively.
In addition, subsequent to the weekly Treasury Bill auction conducted on 30 September, demand extended to the second phase. The second phase was heavily oversubscribed receiving bids amounting to Rs. 20.91 billion as against an offered amount of Rs. 8 billion. Accordingly, the entire offered amount was raised leading to an aggregate subscription of Rs. 88 billion across both phases.
In the money market, the net liquidity surplus was recorded at Rs. 150.13 billion. Of this, Rs. 80.13 billion was deposited at the Central Bank’s SDFR (Standing Deposit Facility Rate) of 8.25%, while no funds were withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 9.25%.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. 70 billion through an overnight repo auction at the rate of 8.73% and Rs. 30 billion through a 31-day repo auction at the rate of 9.12%.
The weighted average yields on overnight call money and repos were recorded at 8.98% and 9.03% respectively.
Forex market
The LKR appreciated marginally against the USD, with the USD/LKR closing at Rs. 330.60/330.75 yesterday, compared with Rs. 330.65/330.75 on the previous day.
Total USD/LKR traded volume for 30 September amounted to $ 130.78 million.
(References: Public Debt Management Office - Ministry of Finance, Central Bank of Sri Lanka, Bloomberg E-Bond Trading Platform, Money Broking Companies)
