The Sri Lanka rupee strengthened against the US dollar on Monday as dealers reported only marginal moves in government bond yields, while the Colombo Stock Exchange recovered early losses to post modest gains.
Sri Lanka rupee edges higher against the dollar while government bond yields hold steady and Colombo stocks gain.
The Sri Lanka rupee opened firmer at 302.57/63 to the US dollar on Monday, slightly up from 302.60/68 the prior session, reflecting a cautious but positive tone in the foreign-exchange market. Dealers said bond yields remained broadly steady during the trading session as a large Treasury bond issue worth 181,000 million rupees was actively traded. Quotes on individual maturities showed little volatility: the 15 March 2028 bond was flat near 9.10/20 percent, while longer-dated papers such as the 15 September 2029 and the 1 July 2030 issues were trading in the high 9 percent range. Yields on the 15 March 2031 and the 15 December 2032 papers held near just above 10 percent, with limited intraday movement.
Foreign-exchange telegraphic transfer rates for major currencies were reported in narrow ranges, with the dollar quoted at 299.25 buying and 306.25 selling, the pound near 398.58/409.94 and the euro at 345.39/356.76, signalling orderly market conditions. The mixed but contained moves in FX and bonds coincided with a rebound on the Colombo Stock Exchange, where the All Share Price Index rose 0.22 percent to 22,368.22 points and the S&P SL20 added 0.19 percent to 6,237.64. Market participants noted that the combination of a sizeable government bond operation and steady yields kept liquidity patterns balanced, allowing equities to recoup early-session losses.
Market watchers said the modest appreciation in the Sri Lanka rupee and steady bond yields reflected a market still digesting domestic liquidity flows and government borrowing activity, without any sharp directional pressure emerging. The stability in yields suggests investor focus remains on longer-term fundamentals and the calibration of monetary and fiscal policy, while exchanges in both FX and bond desks stayed within expected intraday ranges. As the week progresses, analysts will monitor subsequent bond placements and FX demand to assess whether current calm extends or gives way to larger yield or exchange-rate moves.