📈 Treasury Bill Yields Dip Amid Strong 3-Month Demand

Sri Lanka’s latest Treasury Bill auction showed a shift in momentum as the shorter tenor saw its first rate drop in seven weeks, supported by rising market liquidity. • Auction Results: The 91-day T-Bill yield dropped by 7 basis points to 8.20%. However, the 182-day yield rose marginally to 8.25% (+2 bps), while the 364-day rate remained flat at 8.52%. The auction was 90.64% subscribed, raising Rs. 126.90 Bn. • Market Liquidity: System liquidity increased for the 8th consecutive day, nearing the Rs. 250 Bn mark with a net surplus of Rs. 248.48 Bn. The Central Bank conducted an overnight Repo auction to drain Rs. 60 Bn at a weighted average rate of 7.70%. • Secondary Bond Market: Yields remained broadly steady as the market entered a consolidation phase. Sentiment was cautious due to geopolitical tensions in the Middle East. Notable trades included the 2028 maturity dropping to the 9.82%–9.80% range, while 2033 maturities traded at 11.00%. • Forex & Money Market: The Sri Lankan Rupee (LKR) weakened slightly against the US Dollar, closing at Rs. 319.75/320.50 compared to the previous day’s Rs. 319.00/320.00. Daily traded volume stood at US$ 48.25 Mn. _Note: Based on provisional data from Wealth Trust Securities and CBSL._