Monday Dec 01, 2025
Monday Dec 01, 2025
Thursday, 27 November 2025 05:43 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
At the sixth Monetary Policy Review for 2025 announced yesterday, the Central Bank of Sri Lanka (CBSL) decided to hold the Overnight Policy Rate at 7.75%. This marked the third consecutive monetary policy decision to keep rates on hold. The Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR), which are linked to OPR with predetermined margins of ± 50 basis points, also remained unchanged at 7.25% and 8.25%, respectively. The statutory reserve rate was left unchanged at 2%.
The official press release stated the Board arrived at this decision after carefully considering evolving developments and the outlook on both domestic and global fronts. The Board is of the view that the current monetary policy stance will support steering inflation towards the target of 5%. The press release also noted the following: “Credit to the private sector has recorded a notable and broad-based expansion thus far in 2025, supported by the low-interest rate environment.
Imports have risen in recent months, contributing to a widening trade deficit. However, strong inflows from tourism and workers’ remittances have cushioned the impact on the external current account.
Gross Official Reserves were maintained above
$ 6 billion thus far in 2025, supported by net foreign exchange purchases by the Central Bank. Expected additional inflows in December 2025 include receipts from the multilateral organisations.”
The weighted average rates at the weekly Treasury bill auction conducted yesterday remained unchanged across the board. Accordingly, the yields on the 91-day, the 182-day and the 364-day tenors were recorded at 7.52%, 7.91% and 8.03%. This marks the 19th week where T-Bill rates have stayed broadly anchored around prevailing levels.
However, the auction was undersubscribed, raising only 64.32% or Rs. 55.637 billion out of the Rs 86.50 billion offered. This marks the fourth consecutive auction to undersubscribed while the bids received to offered amount ratio stood at 1.44 times.
The Phase II of subscription is now open across all three ISINs until 3.00 p.m. of business day prior to settlement date (i.e., 27.11.2025) at the WAYRs determined for the said ISINs at the auction.
This comes ahead of the Treasury Bond auction, scheduled to be conducted today (27 November). The round of auctions will have a total offered amount of Rs. 42 billion across three available maturities.
The auction will be comprised of:
The settlement for which will be held on 1 December 2025.
For context, the previous Treasury Bond auctions held on 13 November, with a total offered amount of Rs. 80 billion across two available maturities, was fully subscribed at the first phase in competitive bidding. Total bids received exceeded the offered amount by 2.73 times. This marked the first instance in 7 consecutive bond auctions to raise the entire offered amount.
Maturity-wise the results were as follows: The 01.07.30 maturity (9.75% coupon) maturity was issued at the weighted average rate of 9.56%. The entire maturity-wise offered amount of Rs. 35 billion was fully snapped up.
The 15.06.35 maturity (10.70% coupon) was issued at the weighted average rate of 10.69%. The entire maturity-wise offered amount of Rs. 45 billion was raised at the first phase.
The Secondary Bond market yesterday saw yields increase following the Monetary Policy Announcement mainly on the short end of the yield curve. However, the long end of the yield curve continued to consolidate and hold broadly steady. The transaction volumes were seen at healthy levels boosted by several block transactions on selected tenors.
In terms of the Secondary Bond market trade summary, the 01.05.27 and 15.09.27 maturities were seen trading at the rates of 8.69%-8.70% and 8.82% respectively. The 01.05.28, 01.07.28 and 15.12.28 maturities at the rates of 9.10%-9.14%, 9.10% and 9.15%-9.18%. The 15.06.29, 15.09.29 and 15.10.29 maturities were seen trading higher at the rates of 9.49%, 9.55% and 9.54% respectively. The 01.07.30 maturity was seen trading up the range of 9.60%-9.65%. The 15.03.31 maturity was seen changing hands at the rate of 9.94%. The 15.09.34 maturity was seen trading at the rate of 10.62% and the 15.06.35 maturity at the rate of 10.69%.
The total Secondary market Treasury Bond transacted volume for 25 November was Rs. 8.82 billion.
In money markets, the weighted average rates on overnight call money and Repo stood at 7.94% and 7.96% respectively.
The net liquidity surplus was recorded at Rs. 91.37 billion yesterday as an amount of Rs. 103.48 billion was deposited at Central Bank’s SDFR (Standing Deposit Facility Rate) of 7.25%. An amount of Rs. 12.11 billion was withdrawn from the Central Bank›s SLFR (Standard Lending Facility Rate) of 8.25%.
Forex Market
In the Forex market, the USD/LKR rate on spot contracts closed depreciating marginally to 308.00/308.10. as against its previous day’s closing level of Rs. 307.90/308.00.
The total USD/LKR traded volume for 25 November 2025 was $ 68.50 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
