The secondary Bond market yesterday opened the new trading week on a positive note, with yields initially trending lower, extending the recovery momentum observed towards the latter part of last week.
Early buying interest, particularly in liquid benchmark maturities on the short end, exerted downward pressure on yields during the morning session. However, as the day progressed, profit-taking interest emerged, resulting in a marginal reversal in market rates. Consequently, yields gradually edged higher, erasing earlier gains, and the market ultimately closed with yields quoted slightly above opening levels.
Market activity and transaction volumes were relatively healthy during the early part of the session, supported by several block trades. However, activity tapered off sharply as the reversal took hold, eventually reaching a near standstill, with market participants adopting a cautious, wait-and-see approach ahead of today’s scheduled Treasury Bond auction.
In terms of the secondary Bond market trade summary the 01.05.27 maturity traded at the rate of 8.92% and the 15.09.27 maturity at the rate of 8.95%. The 15.02.28 maturity traded at the rate of 9.05%. The 01.05.28 and 01.09.28 maturities were seen trading at the rates of 9.13% and 9.18% respectively. The 15.06.29, 15.10.29, 15.12.29 maturities were seen trading within the ranges of 9.65%-9.67%, 9.65%-9.68%, 9.70%-9.75% respectively. The 15.05.30 maturity traded at the rate of 9.75% and the 01.07.30 maturity traded within the range of 9.75%-9.80%. The 15.03.31 maturity traded at the rate of 10.00%.
The details of the upcoming Treasury Bond auction, scheduled to be conducted today, 30 December, are as follows. The auction will offer a total amount of Rs. 55 billion across two maturities.
The auction will comprise: Rs. 30 billion of Treasury Bonds maturing on 1 July 2030, carrying a coupon rate of 9.75%; and Rs. 25 billion of Treasury Bonds maturing on 1 July 2037, carrying a coupon rate of 10.75%. Settlement for the above securities is scheduled to take place on 1 January 2026.
For context at the previous round of Treasury Bond held on 11 December recorded strong outcomes as the longer-dated maturities were fully subscribed at the first phase, with yields accepted within their respective pre-auction rate bands.
Maturity-wise auction results are summarised below:
- 01.03.2030 maturity saw comparatively weaker demand, with Rs. 20.88 billion (48.5%) raised out of the Rs. 43 billion offered across the first and second phases, at a weighted average yield of 9.55%.
- 01.10.2032 maturity recorded full subscription at the first phase with a weighted average yield of 10.29%.
- 15.06.2035 maturity was also fully subscribed at the first phase, recording a weighted average yield of 10.67%.
The total secondary market Treasury Bond/Bill transacted volume for 26 December 2025 was Rs. 8.65 billion.
In money markets, the net liquidity surplus stood Rs. 118.60 billion. An amount of Rs. 148.88 billion was deposited at Central Bank’s SDFR (Standing Deposit Facility Rate) of 7.25%, while an amount of Rs. 30.28 billion was withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 8.25%.
The weighted average rates on call money and repo were registered at 8.03% and 8.06% respectively.
Forex market
In the Forex market, the USD/LKR rate on spot contracts closed the day depreciating to Rs. 309.85/309.95 as against Rs. 309.65/309.75 the previous day.
The total USD/LKR traded volume for 26 December was $ 68.10 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
