Yield curve softens further as investors maintain buying streak

By First Capital Research

Building on the previous week’s trend, the investors continued to exhibit a buying sentiment, resulting in moderate trading volumes in the secondary market. 

Amongst the traded maturities, 15.02.2028, 15.03.2028 and 01.05.2028 traded between the rates of 9.90 percent and 9.80 percent. Meanwhile, 15.06.2029, 15.09.2029 and 15.12.2029 traded at the rates of 10.30 percent to 10.20 percent. Additionally, 15.03.2031 traded between the rates of 10.78 percent and 10.68 percent. 

Moreover, the recent data published by the Central Bank revealed that the AWPR for the week ending May 2, 2025 decreased by 3bps, settling at 8.36 percent, showcasing a notable reduction from the previous week. 

In the foreign exchange market, the Sri Lankan rupee continued its appreciation against the US dollar for the fourth consecutive day, closing at Rs.299.48/US dollar, compared to the previous day’s rate of Rs.299.58/US dollar. 

Meanwhile, overnight liquidity in the banking system contracted to Rs.128.5 billion from Rs.168.3 billion in the previous session.