Secondary bond market yields hold steady

Tuesday, 8 July 2025 04:42 - - {{hitsCtrl.values.hits}}

Rs. 72.50 b T-bill auction in focus

Rs 200 b T-bond auction details announced

Rupee depreciates

By Wealth Trust Securities

The secondary bond market yesterday saw yields hold broadly steady as market participants were seen adopting a wait-and-see approach ahead of the upcoming Treasury bond auction due on Friday and the anticipated final decision on the United States ‘Reciprocal Tariffs’.

In limited trade, the 01.05.27 and 15.09.27 maturities were seen trading at the rates of 8.30% and 8.45% respectively while the 15.03.28 and 01.05.28 maturities at the rates of 8.75% and 8.80%-8.77% respectively. In addition, the 01.09.28, 15.06.29 and 15.12.29 maturities were seen transacting at the rate of 8.90%, 9.35% and 9.45%-9.42% respectively.

This comes ahead of the Treasury bill auction due today. The auction will have on offer a total amount of Rs. 72.50 billion on offer, a decrease of Rs. 40.50 billion over the previous week. This will consist of Rs. 17.50 billion on the 91-day maturity, Rs. 20 billion on the 182-day and Rs. 35.00 billion on the 364-day maturity.

For reference the weekly Treasury bill auction conducted last Wednesday (2 July) was fully subscribed following two consecutive weeks of undersubscription. The auction raised the entire Rs. 113 billion offer at the 1st phase in competitive bidding. The total bids received exceeded the offered amount by 1.57 times. Interestingly, the weighted average yield rate on the 182-day tenor increased by 03 basis point to 7.78%, marking the third consecutive weekly increase. However, the weighted average yield rate on the 91-day tenor and 364-day tenors remained steady at 7.55% and 7.94% respectively. Which marked the 5th consecutive week that these two tenors have remained unchanged at these levels.

In addition, this week is scheduled to have a round of Treasury bond auctions, due on the 11 July, with a total offered amount of Rs. 200 billion.

The auction will be comprised of:

nRs. 75.00 billion from a 15 October 2029 Maturity bearing a coupon rate of 10.35%
nRs. 75.00 billion from a 1 June 2033 Maturity bearing a coupon rate of 09.00%
nRs. 50.00 billion from a 15 September 2034 Maturity bearing a coupon rate of 10.25%

The settlement for which will be held on 15 July.

The total secondary market Treasury bond/bill transacted volume for 4 July, was Rs. 7.25 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 7.75% each respectively.

The net liquidity surplus was recorded at Rs. 88.57 billion yesterday. An amount of Rs. 0.23 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.25%, while an amount of Rs. 88.79 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 7.25%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts closed the day depreciating to Rs. 301.00/301.40 as against 300.10/300.20 the previous day.

The total USD/LKR traded volume for 4 July was $ 34.65 million.

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

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