The Sri Lanka rupee closed flat at 302.55/60 against the US dollar on Tuesday as local bond yields were broadly steady, with modest upticks in the mid tenors, dealers said. Market participants are focused on an upcoming Rs43,000 million Treasury bill auction that could affect liquidity and short-term rates.
Sri Lanka rupee flat at 302.55/60 vs USD as mid-tenor bond yields inch higher ahead of Rs43,000m T-bill auction
The Sri Lanka rupee held steady on Tuesday, finishing at 302.55/60 to the US dollar, according to dealers active in the FX market. The narrow move in the exchange rate reflected balanced demand for dollars and a muted reaction to global risk sentiment during the trading session. Domestic bond markets saw only small adjustments on the mid-tenor maturities, with dealers describing the day as broadly stable.
Secondary market activity showed a mix of minor shifts across maturities. The 15.12.2026 bond ended the day at 8.25/30 percent, slightly tighter than its prior close of 8.25/35 percent. The 15.12.2028 issue was quoted at 9.15/20 percent. Yields on the 15.12.2029 paper ticked up to 9.60/62 percent from 9.55/60 percent previously, while the 01.07.2030 bond closed at 9.73/77 percent, up from 9.68/72 percent. The longer 15.12.2032 maturity held flat at 10.45/50 percent. Dealers attributed the minor increases on the mid-tenors to thin liquidity and position adjustments ahead of the scheduled bill auction.
An auction of Treasury bills worth Rs43,000 million is scheduled for Wednesday, a key near-term event that market participants say will be watched closely for its impact on money-market liquidity and short-term yields. Auction outcomes can influence dealer positioning in both the bills and bonds markets and will likely set the tone for the immediate trading days.
Looking ahead, the Sri Lanka rupee and local bond yields are expected to respond to a combination of the auction result, central bank liquidity operations, and broader external factors including the US dollar’s direction. Investors and traders will be monitoring auction coverage and settlement dynamics to reassess short-term funding costs and risk premia.