Muted activity leaves yield curve steady in secondary market

By First Capital Research

The secondary market experienced another quiet trading day, leaving the yield curve unchanged due to limited activity. 

Trading volumes remained light, with only a few maturities recording any movement. At the short end of the curve, the 01.07.2028 and 15.10.2028 bonds were traded within a range of 8.95% to 9.01%. Further along the curve, the 15.12.2029 maturity saw trades at a yield of 9.55%.

The Central Bank concluded its weekly Treasury Bill auction yesterday, raising LKR 66.1Bn, 28.5% below the initially offered LKR 92.5Bn, with yields remaining unchanged across all maturities. The 3M bill generated LKR 31.3Bn, with its weighted average yield remaining unchanged at 7.62%. The 6M bill raised LKR 17.6Bn, with yield remaining unchanged at 7.91%. Meanwhile, the 12M bill drew LKR 17.3Bn, with yield remaining unchanged at 8.03%.

In the forex market, the LKR depreciated against the greenback, closing at LKR 302.04/USD, compared to the previously seen rate of LKR 301.95/USD. Meanwhile, overnight liquidity in the banking system expanded to LKR 106.2Bn from the previously seen level of LKR 90.2Bn.