Yield curve holds steady amid pre-auction buying

By First Capital Research

The secondary market yield curve saw moderate trading volumes and heightened activity yesterdau, while remaining broadly stable. 

Prior to the bond auction, buying interest was observed, particularly in the 2028 and 2029 maturities. As a result, bonds maturing on 15.02.2028, 15.03.2028, and 01.05.2028 traded within a range of 8.65% to 8.75%. 

Meanwhile, maturities on 15.06.2029, 15.09.2029, and 15.12.2029 traded between 9.35% and 9.49%.

CBSL conducted a T-Bond auction yesterday, which saw the initially offered amount of Rs. 111.0bn was fully raised. This amount was raised through the issuance of 2029 and 2032 maturities which registered weighted average yields of 9.41%, and 10.29% respectively. 

In the forex market, the LKR appreciated marginally against the greenback, closing at Rs. 299.98/USD, compared to the previously seen rate of 299.10/USD. 

Meanwhile, overnight liquidity in the banking system contracted to Rs. 178.6bn from Rs. 184.8bn in the previous session.