Yield curve edges slightly higher amid pre-auction selling pressure

Secondary market trading was characterized by selling interest ahead of the upcoming T-bond  auction, resulting in the yield curve edging slightly higher. Overall market activity remained  subdued, with only moderate trading volumes recorded during the session.

In the 2030 maturity segment, the 15.05.2030, 01.08.2030, and 15.10.2030 maturities traded within a yield range of 11.30%-11.50%. Further along the curve, the 01.10.2032 maturity changed hands at 11.65%, while the 01.11.2033 maturity traded between 11.75% and 11.83%.

The Public Debt Management Office is expected to issue LKR 150.0Bn in T-Bonds on 13 July 2026. The issuance will comprise LKR 70.0Bn in 2030 maturity, followed by LKR 50.0Bn in 2034 maturity and LKR 30.0Bn in 2037 maturity. On the external front, the LKR depreciated against the USD, standing at LKR 335.46/USD, compared to LKR 334.71/USD seen earlier. Liquidity in the banking system expanded to LKR 139.01Bn from LKR 125.89Bn recorded previously. Popular maturities traded: 01.08.2030: +8bps 15.10.2030: -9bps