Auction alert nudges the curve as yields dip at belly

By First Capital Research

On 23rd April 2025, CBSL announced a T-Bond auction scheduled for 28th April. The auction will offer Rs. 60.0 bn under the 2029 maturity with a coupon rate of 11.75%, Rs. 55.0bn under the 2031 maturity with a coupon rate of 11.25%, and Rs. 40.0bn under the 2035 maturity with a coupon rate of 11.50%.

In the wake of this announcement, the market responded with renewed buying interest—particularly concentrated around the 2029 maturities. This activity induced a slight softening of yields at the belly of the curve. 

Notably, the 15.03.2028 and 01.05.2028 maturities traded at 10.00%, while the 01.07.2028 and 15.10.2028 maturities traded at 10.10% and 10.15%, respectively. Meanwhile, the 15.09.2029 maturity traded at 10.50%, with the 15.12.2029 maturity edging slightly higher at 10.55%.

In the forex market, the LKR appears to have marginally weakened against the greenback, closing at Rs. 299.8/USD, compared to the previous day’s rate of 299.7/USD. Meanwhile, overnight liquidity in the banking system registered an uptick, standing at Rs. 105.9bn, from Rs. 94.7bn in the prior session.