📈 Sri Lanka Bond Auction: Full Rs. 250 Bn Acceptance Sparks Secondary Market Rally

The Treasury Bond auction saw total acceptance of the offered Rs. 250 Bn during its initial phase, supported by strong demand with a bid-to-accepted ratio of 2.43x. Post-auction buying frenzy drove secondary market yields below auction weighted averages. • Bond Auction Yields (Mixed Outcomes): • 01.02.2031: Weighted average at 11.90% (below pre-auction rate of 11.95%). • 15.10.2034: Weighted average at 12.42% (in line with market levels). • 15.08.2036: Weighted average at 12.91% (above previous closing rate). • 01.07.2037: Weighted average at 13.01% (above previous closing rate). • Direct Issuance: Additional 10% window open across maturities until 3:00 PM. • Secondary Market Activity: • Elevated auction yields triggered strong buying interest, driving yields down across various maturities (e.g., 2031 maturity dropped to 11.75%; 2034 dropped to 12.27%). • Money Market & Liquidity: • Net Surplus: Recorded at Rs. 175 Bn. • Central Bank Ops: Rs. 115 Bn deposited at SDFR (8.25%); Rs. 60 Bn drained via overnight repo auction at 8.68%. • Overnight Rates: Call money averaged 9.00%, Repo averaged 9.04%. • Forex Market: • Rupee: Marginal gain, spot USD/LKR closing at Rs. 336.00/336.10 (vs. previous Rs. 336.10/336.20). • Traded Volume: US$ 112.54 Mn (reported for July 28).