📈 Sri Lanka Bond Market Yields Dip; Rs. 70 Bn T-Bill Auction in Focus

• Secondary Bond Market: The secondary market continued to rally yesterday, driving down yields on selected tenors while the rest consolidated. Market sentiment was boosted by positive developments in the US-Iran conflict and sliding Brent Crude prices, easing inflation and pressure on interest rates. Activity and transaction volumes remained robust. • Yield Movements by Maturity: • 15.12.26 traded at 10.25% • 15.02.28 dropped to 10.90% - 10.85% • 15.12.29 dropped to 11.28% - 11.20% • 2030 maturities (May & Aug) traded between 11.40% - 11.53% • 2032/2033 maturities fluctuated between 11.62% - 11.75% • 15.06.34 traded down to 11.90% - 11.80%, while 15.03.35 held at 12.00% • Treasury Bill Auction: Today's auction will offer Rs. 70 Bn (Rs. 35 Bn for 91-day, Rs. 25 Bn for 182-day, and Rs. 10 Bn for 364-day), matching a scheduled maturity of roughly Rs. 73 Bn. At last week's auction, yields rose for a fourth consecutive week (91-day up 25 bps to 10.09%; 182-day up 26 bps to 10.27%), leaving the 6-month yield above the 1-year rate (10.16%). Last week's auction raised just 51.25% of its Rs. 140 Bn target. • Money Market & Liquidity: Net liquidity surplus stood at Rs. 40.07 Bn. The weighted average call money rate was 9.21%, and the REPO rate was 9.24%. Commercial banks deposited Rs. 93.20 Bn at the Central Bank's 8.25% SDFR and withdrew Rs. 53.14 Bn from the 9.25% SLFR. • Forex Market: The USD/LKR spot contracts closed weaker at Rs. 334.75/335.50 against the previous close of Rs. 333.00/334.50. Total traded volume stood at US$ 73.85 Mn.