Secondary Bond market yields trade higher as global oil prices surge

Tuesday, 10 March 2026 00:20 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary Bond market yesterday opened the week with yields increasing sharply as a knee-jerk reaction to the surge in global energy prices. Brent crude oil futures rose more than 15% to above $100 per barrel, after earlier rallying by as much as 29%. The spike followed production cuts by major Middle Eastern producers amid disruptions in the Strait of Hormuz.

As a result, secondary market two-way quotes closed higher on the day, carrying forward the upward momentum from the previous week.

Trading activity was subdued; however, transaction volumes were seen at healthy levels boosted by several block transactions. Market participants adopted a cautious stance amid the ongoing global developments and ahead of the back-to-back Treasury Bill and Bond auctions.

The 15.09.27 maturity traded up the range of 8.60% to 8.80% and the 15.02.28 and 15.12.28 maturities traded higher within the range of 9.22%-9.30% and 9.51%-9.65% respectively. The 15.09.29 maturity traded at the rate of 9.65%. The 01.03.30 maturity traded at the rate of 9.85%. The 01.06.33 maturity traded within the range of 10.60%-10.72%. The 15.06.35 maturity traded up the range of 10.90%-11.00%.

The details of the next upcoming Treasury Bond auctions, scheduled to be conducted this Thursday 12 March are announced. The round of auctions will have a total offered amount of Rs. 130 billion across three available maturities.

The auction will be comprised of: Rs. 30 billion from a 1 March 2030 maturity bearing a coupon rate of 9.50%; Rs. 60 billion from a 15 June 2034 maturity bearing a coupon rate of 10.75%; Rs. 40 billion from a 15 August 2036 maturity bearing a coupon rate of 10.85%; the settlement for which will be held on 16 March 2026.

The total secondary market Treasury Bond/Bill transacted volume for 6 March was Rs. 10.46 billion.

In money markets, the net liquidity surplus was recorded at Rs. 334.72 billion yesterday. The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out an amount of Rs. 125 billion by way of overnight repo auction at a weighted average rate of 7.48% while an amount of Rs. 209.74 billion was deposited at Central Bank’s SDFR (Standing Deposit Facility Rate) of 7.25%. An amount of Rs 0.02 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.25%.

The weighted average rates on overnight call money and Repo stood at 7.65% and 7.66% respectively.

Forex market

The USD/LKR rate on spot contracts was seen depreciating further to close the day at Rs. 311.60/311.90 as against the previous day’s closing level of Rs. 310.80/311.20. The total USD/LKR traded volume for 6 March was $ 54.95 million.

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