Tuesday Feb 24, 2026
Tuesday Feb 24, 2026
Wednesday, 21 January 2026 00:04 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
The money market liquidity surplus was recorded at Rs. 200.77 billion yesterday, hitting a new recent high, up from Rs 196.08 billion recorded the day before. This marks the highest level in almost 6 months - since end May 2025.
Liquidity has seen a steady climb from the lows observed in recent months; in 19 December, overnight liquidity dropped to Rs. 65.92 billion. As such, the current level represents an approximately 205% increase from the recent lows. The weighted average rates on overnight call money and Repo also continued to drop amidst this heavily market plus environment, recorded at 7.90% and 7.91% respectively, down considerably from recent highs.
Meanwhile, the Secondary Bond market extended its rally yesterday, carrying forward the renewed bullish momentum, as buying interest remained firmly intact.
Market sentiment was underpinned by a combination of strong system liquidity, moderating money market rates, and sustained institutional demand, which collectively reinforced the downward bias in yields. The supportive liquidity backdrop remained a key driver, with the overnight money market maintaining a significant surplus.
Persistently elevated liquidity conditions eased funding constraints across the system, translating into lower short-term money market rates and improved carry dynamics for Bondholders, strengthening appetite along the yield curve.
Against this backdrop, Bond yields dropped lower, with concentrated buying interest observed. Market activity and transaction volumes remained healthy, supported by continued balance-sheet driven interest from institutional players, reinforcing the constructive tone and consolidating the ongoing recovery.
Accordingly, trades were observed on the 15.05.26 maturity down the range of 8.35% to 8.30%. The 01.05.27 maturity traded at the rate of 8.95%. The 01.09.28, 15.10.28 and the 15.12.28 maturity traded at the rates of 9.18%, 9.20% and 9.22%-9.20% respectively. The 01.03.30 maturity traded within the range of 9.75%-9.72%. The 15.03.31 maturity experienced a notable decline and traded down the range of 10.10% to 10.00%. The 01.06.33 maturity traded within the range of 10.72%-10.71%. The 15.06.35 maturity traded down from an intraday high of 11.10% to a low of 11.07% on the back of sizeable volumes.
Today’s scheduled weekly Treasury Bill auction will have on offer a total amount of Rs. 125 billion. The auction will be comprising of Rs. 40 billion in 91-day Bills, Rs. 65 billion in 182-day Bills, and Rs. 20 billion in 364-day Bills. The offered amount is marginally below the maturing volume, which is estimated at around Rs. 133.58 billion.
For context, at the weekly Treasury Bill auction held last Wednesday (13 January), weighted average yields recorded an upwards movement for a fourth consecutive week, however witnessing a significant moderation in the increasing momentum. Accordingly, the weighted average yield on the 91-day Bill rose by 7 basis points to 7.95% and the 364-day increased marginally by 1 basis point to 8.48% respectively. The weighted average on the 182-day remained steady at 8.44%.
The total secondary market Treasury Bond/Bill transacted volume for 19 January was Rs. 5.75 billion.
Forex market
In the forex market, the USD/LKR rate on spot contracts were seen closing the day appreciating to Rs.309.65/309.70 as against its previous day’s closing level of Rs. 309.72/309.77.
The total USD/LKR traded volume for 19 January 2026 was $ 80.61 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
