Tuesday Aug 18, 2026
Tuesday Aug 18, 2026
Tuesday, 18 August 2026 11:20 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
The secondary Bond market yields consolidated broadly at the start of the fresh trading week. While slight profit-taking pressure emerged following the recent extended rally, selling interest remained contained, with positive sentiment stemming from comments by Central Bank Governor Dr. Nandalal Weerasinghe helping to contain upward pressure on yields. Market activity moderated notably as participants adopted a more watchful stance at prevailing levels.
In an interview with Bloomberg in Sydney, the Governor indicated that inflation is expected to moderate toward the CBSL’s 5% target during the latter part of the second half of 2026 and into next year, while noting that the economy is already showing signs of stabilisation following the monetary tightening undertaken in May and Government measures to curb imports. He further stated that inflation would remain manageable if oil prices remained around $ 80 per barrel through year-end and that the tighter monetary conditions would not have a significantly adverse impact on growth, with economic expansion projected at around 4%–5% during the second half.
Overall, the Governor’s remarks reinforced expectations that the current degree of monetary restraint may be sufficient to contain inflationary pressures, helping absorb the prevailing profit-taking interest and maintain a supportive undertone across the secondary bond market.
The limited activity was observed on selected tenors. Accordingly, the 15.02.28 and 15.03.28 traded at yields of 10.01% and10.00% respectively. The 15.05.30 maturity traded at 10.70% and the 01.08.30 at 10.80%. The 15.12.32 maturity traded down from11.35% to 11.30%. The 01.11.33 and 15.10.34 traded at yields of 11.50% and 11.70% respectively.
In the money market, the net liquidity surplus stood at Rs. 161.35 billion yesterday. Of this, Rs. 111.35 billion was absorbed via the Central Bank›s Standing Deposit Facility (SDF) at 8.25%, while a further Rs. 50 billion was mopped up through an overnight Repo auction conducted by the Domestic Operations Department (DOD) at a weighted average rate of 8.75%. An additional Rs. 10.00 billion was absorbed through a 14-day term repo auction at a rate of 9.00%.
The weighted average rates on overnight call money and Repos were recorded at 8.78% and 8.84% respectively.
Forex market
The USD/LKR rate on spot contracts closed the day at Rs. 332/332.20, with the rupee appreciating further from its previous close of Rs. 332.80/332.90.
The total USD/LKR traded volume for 14 August was $ 112.48 million.
(References: Public Debt Management Office - Ministry of Finance, Central Bank of Sri Lanka, Bloomberg E-Bond Trading Platform, Money Broking Companies)
