Secondary Bond market yields drop further

Friday, 7 November 2025 00:06 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary Bond market yesterday saw a further decline in yields on the back of strong buying interest. Market activity and transaction volumes were observed at robust levels, including several block trades.

This bullish momentum and downward trajectory in yields driven by fiscal over-performance, US Fed Monetary policy easing, increased foreign investment in LKR bonds and continual undersupply at T-Bill primary auctions.

In terms of the secondary Bond market trade summary, the 01.08.26 and 15.12.26 maturities traded at the rates of 8.05% and 8.10% respectively. The 15.02.28 maturity was seen trading at the rate of 9.00% and the 01.07.28 maturity at the rate of 9.10%.

The 2029 tenors in particular saw aggressive buying interest and heavy activity as a result. Yields were seen dropping considerably for an intraday movement.

Accordingly, the 15.06.29, 15.09.29, 15.10.29 and 15.12.29 maturities traded down the ranges of 9.48%-9.45%, 9.52%-9.49%, 9.53%-9.50% and 9.55%-9.48%. Similarly, the 2030 tenors also saw robust demand. The 15.05.30 and 01.07.30 maturities traded down the ranges of 9.665%-9.62% and 9.72%-9.68% respectively.

The 01.07.32 and 15.12.32 maturities were seen trading lower at the rates of 10.51% and down the range of 10.45%-10.40%. The 01.11.33 maturity saw its yield decline down the range of 10.58%-10.55%.

The total secondary market Treasury Bond/Bill transacted volume for 4 October of 2025 was Rs. 18.80 billion.

In money markets, the net liquidity surplus was recorded at Rs. 125.92 billion yesterday. An amount of Rs. 143.16 billion was deposited at Central Bank’s SDFR (Standing Deposit Facility Rate) of 7.25%, while an amount of Rs. 17.24 billion was withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 8.25%.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 7.91% and 7.96% respectively.

Forex market

In the forex market, the USD/LKR rate on spot contracts closed appreciating slightly Rs. 304.85/304.95 yesterday as against its previous day’s closing level of 304.65/304.80.

The total USD/LKR traded volume for 4 November 2025 was $ 160.80 million.

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