📈 Secondary Bond Yields Reverse Morning Gains to Close Lower Ahead of Rs. 100 Bn T-Bill Auction

• Secondary Bond Market: Yields experienced early upward pressure from selling interest before strong buying demand absorbed the pressure, pushing rates lower across the curve. Short-term maturities (15.12.26 & 15.01.27) traded at 9.42%–9.50%. Key benchmark maturities recovered from intraday highs to close lower: 01.07.30 dropped from 11.65% to 11.55%, 01.02.31 from 11.80% to 11.70%, and 15.09.34 closed at 12.45%/12.50%. • Upcoming T-Bill Auction: Focus shifts to today’s treasury bill auction offering Rs. 100 Bn (Rs. 40 Bn for 91-day, Rs. 35 Bn for 182-day, and Rs. 25 Bn for 364-day tenors), below the maturing volume of Rs. 107.70 Bn. • Previous Auction Performance: At last week's auction, weighted average yields held steady (182-day at 9.44%, 364-day at 9.95%), while 91-day yields rose 4 bps to 9.30%. The PDMO raised Rs. 66.13 Bn (73.47% of total offer) initially, with total weekly treasury bill issuance reaching Rs. 73.33 Bn after Phase 2. • Money Market Liquidity: Net liquidity surplus stood at Rs. 128.29 Bn. Central Bank absorbed Rs. 50 Bn via overnight repo at 8.75%. Weighted average rates for overnight call money and repos settled at 9.00% and 9.04% respectively. • Forex Market: The USD/LKR spot exchange rate closed flat at Rs. 331.60/331.70, with traded volumes reaching US$ 33.25 Mn on October 19.