Buying stance emerges, yield curve declines on short and mid tenors

By First Capital Research

Following the Budget 2025 announcement, the yield curve in the secondary market declined across the short and mid tenors, as investors adopted a buying stance. This shift led to heightened trading volumes and increased market activity. 

Amongst the traded maturities at the short end 01.08.26 and 15.12.26 traded at the range of 8.65% to 8.85% whilst 01.05.27 traded between 9.40% to 9.30%.

Meanwhile, 15.09.27 maturity traded at 9.65% to 9.55%.  At the mid end 15.02.28 and 15.03.28 maturities traded at the rate of 10.05% whilst both 01.05.28 and 01.07.28 traded between 10.14% to 10.27%. 

Furthermore, 15.10.28 and 15.12.28 traded between 10.33% to 10.42%.  2029 bond maturity 15.09.29 traded between 10.78% to 10.74% whilst 2030 maturity 15.10.30 traded between 11.21% to 11.17%. 

In the forex market, the LKR appreciated against the green bank and recorded at 295.3/USD compared to the 295.5/USD recorded previous day. 

The CBSL holdings of government securities remained unchanged, closing at Rs. 2,511.92bn yesterday. Overnight liquidity in the banking system contracted to Rs. 146.7bn from Rs. 159.7bn recorded the previous day.