Yield curve tapers down from mid to long end

By First Capital Research

The market participants continued to maintain the buying stance, following the T-bond auction, which was held on March 12, 2025, resulting in both high trading volumes and market activity. 

Accordingly, the secondary market yield curve experienced a slight downturn from mid to long end of the curve by c.5-10bps. 

The secondary market interest was predominantly in the 2028, 2029, 2030, 2031 and 2032 maturities. Accordingly,at the belly end of the curve, the 15.02.2028 and 01.05.2028 maturities traded at the rates of 9.98 percent and 10.05 percent, respectively, whilst both the 01.09.2028 and 15.10.2028 bonds traded at the rate of 10.20 percent. 

Meanwhile, the 15.12.2028 maturity traded at the rate of 10.32 percent and 15.06.2029, 15.09.2029 and the 15.12.2029 maturities traded at the rates of 10.50 percent, 10.55 percent and 10.60 percent, respectively. 

Furthermore, 15.05.2030, 15.10.2030, 15.03.2031, 01.12.2031, 01.10.2032 and 15.12.2032 traded at the rates of 10.80 percent, 10.85 percent, 11.15 percent, 11.25 percent, 11.30 percent and 11.35 percent, respectively.  

On the external front, the Sri Lankan rupee slightly appreciated against the US dollar, closing at Rs.295.4/US dollar, compared to Rs.295.5/US dollar recorded the previous day.