Friday Aug 21, 2026
Friday Aug 21, 2026
Thursday, 20 August 2026 00:02 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
Treasury Bill yields extended their slide at this week’s auction, marking a sixth consecutive week of declines as aggressive demand continued to pull yields lower across all three tenors.
The sharpest move came at the front end, with the 91-day yield falling 22 basis points to 9.22%. The 182-day bill followed with an 18-basis-point decline to 9.60%. The 364-day bill shed 10 basis points to 9.91%, pushing the one-year yield below the 10.00% threshold for the first time in 12 weeks.
The latest move leaves Bill yields at their lowest levels since late May, or approximately 13 weeks. The scale of the rally has been particularly striking since yields peaked in early July, with yields across the three tenors now down by a cumulative 30–101 basis points from their early-July peaks.
Demand remained firmly in the driver’s seat with the Public Debt Department raising the full Rs. 140 billion offered, and each tenor meeting its targeted allocation. Total bids amounted to 2.67 times the offer. The heavily subscribed auction underscored the depth of liquidity chasing short term Government paper.
The Phase II subscription across all three maturities is now open until 3 p.m. on 20.08.2026 at the Weighted Average Yield Rates (WAYRs) determined at the auction. The auction details are set out below:
The secondary Bond market yesterday saw buying interest on selected tenors drive yields lower, while the rest of the yield curve consolidated. Transaction volumes remained robust, reflecting strong market depth.
The 15.02.28 traded at yields of 10.00%-9.99% while the 01.05.28 traded at 10.05%. The 15.10.29 and 15.12.29 maturities traded at yields of 10.52%-10.50% and 10.55% respectively. The 01.08.30 and 15.10.30 traded within the ranges of 10.85%-10.80% and 10.92%-10.85% respectively. The 15.12.32 maturity rallied and traded down to a new low of 11.25%. The 15.10.34 also saw robust buying interest drive its yields lower from 10.85% to 10.79%. The 01.07.37 traded down to 12.15%-12.12%.
In the money market, the net liquidity surplus remained elevated and was recorded at Rs. 168.98 billion. Rs. 78.89 billion was deposited at the Central Bank’s SDFR (Standing Deposit Facility Rate) of 8.25%.
In addition, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka mopped out Rs. 60 billion by way of an overnight repo auction at a weighted average yield of 8.75% as well as Rs. 30 billion through a 6-day term repo auction at the weighted average yield of 8.72%.
The weighted average yields on overnight call money and repos were recorded at 8.79% and 8.83% respectively.
Forex market
The USD/LKR rate on spot contracts was seen closing at Rs. 331.05/331.15 yesterday, with the rupee appreciating further from Rs. 331.90/332 recorded on the previous day.
The total USD/LKR traded volume for 18 August amounted to $ 62.92 million.
(References: Public Debt Management Office - Ministry of Finance, Central Bank of Sri Lanka, Bloomberg E-Bond Trading Platform, Money Broking Companies)
