Secondary Bond market yields spike

Friday, 20 March 2026 00:02 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary Bond market yesterday continued the upward yield trend, rising sharply by around 20–30 basis points across the curve amid a pronounced deterioration in global risk sentiment.

The move was largely driven by a surge in Brent crude futures to nearly $ 117 per barrel, as escalating geopolitical tensions in the Middle East and fresh attacks on key energy infrastructure intensified concerns over supply disruptions and a renewed global inflation shock. This was further compounded by hawkish undertones from major Central Banks. The Federal Reserve and the Bank of Japan, despite holding rates steady, warned that an escalation in geopolitical tensions could push inflation higher. Against this backdrop, risk-off sentiment prompted broad-based selling across maturities. However, at the elevated yield levels renewed buying interest helped cap the upward movement in rates. Market activity and transaction volumes were observed at heightened levels during the sell-off.

In terms of the Secondary Bond market trade summary, the 15.09.27 maturity traded up the range of 8.55%-8.60%. The 01.05.28 maturity was seen trading up the range of 9.50%-9.61%. The 15.06.29, 15.09.29, 15.10.29 and 15.12.29 maturities were seen trading up the ranges of 9.70%-9.90%, 9.75%-9.90%, 9.90%-10.05% and 9.90%-10.10%. The 01.03.30 maturity traded up the range of 9.80%-10.00%. The 15.03.31 maturity traded up the range of 10.00%-10.10%. The 15.12.32 maturity traded at the rate of 10.45%. The 01.06.33 maturity traded up the range of 10.70%-10.80% and the 01.11.33 maturity traded up the range of 10.70%-11.005%. The 15.06.34 and 15.09.34 maturities traded up the ranges of 10.95%-11.05% and 11.05%-11.12%.

The total secondary market Treasury Bond/Bill transacted volume for 18 March was Rs. 51.91 billion.

In money market, the net liquidity surplus in money market was recorded at Rs. 283.00 billion yesterday. The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out an amount of Rs. 100 billion.

Further an amount of Rs 183.12 billion was deposited at Central Bank’s SDFR (Standing Deposit Facility Rate) of 7.25% as against an amount of Rs 0.12 billion withdrawn from the Central Bank’s SDFR (Standing Deposit Facility Rate) of 8.25%.

The weighted average rates on overnight call money and Repo yesterday stood at 7.58% and 7.60% respectively.

Forex market

In the Forex market, the USD/LKR rate on spot contracts closed the day at 311.50/311.65, as against its previous day’s closing level of Rs. 311.30/311.50.

The total USD/LKR traded volume for 18 March was Rs. 38.45 million.

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