📈 Liquidity Surge Drives Bond Rally & Rupee Appreciation

The Sri Lankan money market hit a six-month high in liquidity, significantly boosting sentiment in the secondary bond market and contributing to a strengthening Rupee. • Liquidity & Rates Market surplus reached Rs. 200.77 Bn, a recent peak and a ~205% increase from December lows of Rs. 65.92 Bn. Consequently, overnight call money and Repo rates dropped to 7.90% and 7.91% respectively. • Secondary Bond Market A strong rally was observed across the yield curve, fueled by institutional demand and lower funding constraints. Key trades included: 2026 maturities: 8.35% – 8.30% 2031 maturities: Notable decline to 10.10% – 10.00% 2035 maturities: 11.10% – 11.07% on high volumes. • Treasury Bill Auction A Rs. 125 Bn auction is scheduled for today (21 Jan), offering: 91-day: Rs. 40 Bn 182-day: Rs. 65 Bn 364-day: Rs. 20 Bn The total offer is slightly below the maturing volume of Rs. 133.58 Bn. • Forex Market The Sri Lankan Rupee appreciated, with the USD/LKR spot rate closing at Rs. 309.65/70 (vs. Rs. 309.72/77 previously). Daily traded volume stood at US$ 80.61 Mn. _Note: Based on provisional market data as of 21 January 2026._