📈 Sri Lanka Secondary Bond Market Rallies; Yield Curve Shifts Down

• Market Overview: Secondary bond market experienced a strong rally with yields declining sharply across medium to longer-tenor maturities, driven by falling global oil prices and declining regional bond yields. • Bond Yield Movements: • Short-end (2026-2027): 15.12.26 traded at 9.40%-9.36%; 15.01.27 at 9.45%-9.40%. • Medium-term (2030): 01.03.30 dropped from 11.47% to 11.00%; 15.10.30 dropped from 11.62% to 11.00%. • Long-end (2034-2036): 15.10.34 fell from 12.63% to 12.00%; 15.08.36 dropped from 12.90% to 12.25%. • Treasury Bill Auction: • 91-day yield rose +1 bps to 9.35%. • 182-day (9.44%) and 364-day (9.95%) yields held steady for the 5th straight week. • PDMO raised Rs. 65.9 Bn (73.22% of Rs. 90 Bn offered); total bids reached 1.73x offer. • Liquidity & Foreign Holdings: • Surplus market liquidity hit an 8-month high at Rs. 422.29 Bn (up from Rs. 392.68 Bn). • Foreign holdings in rupee treasuries dropped 3.20% (-Rs. 6.08 Bn) to Rs. 184.86 Bn—marking the 3rd consecutive week of outflows. • Forex & Money Market: • USD/LKR closed broadly steady at Rs. 332.50/332.60 (traded range: Rs. 332.30 – 332.80). • Average daily forex volume: US$ 72.28 Mn. • Call Money & Repo weighted average rates closed at 9.04% and 9.13%.