📈 Institutional Inflows Drive Sri Lankan Bond Market Rally; Rupee Gains

• Market Momentum: The secondary bond market extended its rally, heavily driven by aggressive buying flows from large institutional and foreign buyers. High transaction volumes and block trades successfully compressed yields across the curve. • Yield Curve Performance: Demand was heavily concentrated on the 2030 and 2035 benchmark maturities. - 2030 Maturities: The 15.10.30 paper dipped to 11.23%-11.35% on massive volume, while 15.05.30 traded tightly at 11.12%-11.15%. - 2035 Maturities: The 15.03.35 maturity traded in a narrow band of 11.74%-11.75%. - Shorter Tenors: 2027 and 2028 maturities saw steady yields, holding between 10.50% and 10.70%. • Liquidity & Money Market: System liquidity remains strong, posting a net surplus of Rs. 81.20 Bn, all deposited at the Central Bank’s 8.25% Standing Deposit Facility Rate (SDFR). Overnight call money and repo weighted averages held steady at 9.21% and 9.25% respectively. • Forex & Rupee Appreciation: The Sri Lankan Rupee (LKR) appreciated marginally against the US Dollar, with spot contracts closing stronger at LKR 335.85/336.00 compared to the previous day's close of LKR 336.20/336.40. Total spot volume recorded for July 1 stood at US$ 132.50 Mn. _Data source: Wealth Trust Securities / Central Bank of Sri Lanka_