Secondary bond market activity improves; yields dip down

• Rupee continues to appreciate

By Wealth Trust Securities

The secondary bond market yesterday saw moderately improved activity, with yields declining. Trades were centred on short tenor bonds between 2026-2028. In particular, the recent auction maturities of 15.12.26 and 15.12.28 were seen declining from intraday highs to lows of 11.35% to 11.32% and 12.20% to 12.12% respectively. Additionally, trades were observed on the 01.05.27 and 01.07.28 maturity at levels of 11.90% and 12.13% respectively. 

In the secondary bill market April 2024 maturities were seen trading within the range of 9.90% to 9.75%. Whereas June 2024 maturities (approximately 3 months) were seen trading at 10.10% and February/March 2025 (approximately 12 months) maturities were seen changing hands at levels of 10.25% to 10.35%. Treasury bill transactions experienced substantial volumes.

The total secondary market Treasury bond/bill transacted volume for 14 March was Rs. 71.40 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 9.18% and 9.21% respectively while the net liquidity stood at a deficit of Rs. 36.08 billion yesterday.

The DOD (Domestic Operations Department) of the Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 71.05 billion at the weighted average rate of 9.18%. An amount of Rs. 0.63 billion was withdrawn from Central Banks SLFR (Standing Lending Facility Rate) of 10.00 while an amount of Rs. 35.60 billion was deposited at the SDFR (Standing Deposit Facility Rate) of 9.00%.

 Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day appreciating further to Rs. 305.50/305.55 yesterday, against its previous day’s closing level of Rs. 306.10/306.20.

The total USD/LKR traded volume for 13 March was $ 84.44 million.

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