The Sri Lanka rupee weakened in early trading Thursday, opening at 304.75/85 to the US dollar in the spot market, slightly softer than the previous day, while government bond yields opened largely steady amid an ongoing Rs.80,000 million Treasury bond auction.
Sri Lanka rupee dips to 304.75/85 as Rs.80,000m Treasury bond auction proceeds and stocks trade lower
The Sri Lanka rupee opened marginally weaker on Thursday, with dealers reporting a spot-market quote of 304.75/85 to the US dollar compared with 304.60/65 the previous session. Market participants said the modest depreciation came alongside steady bond yields as the Central Bank and Treasury oversaw an active auction of Rs.80,000 million in Treasury Bonds. Traders quoted the 15 October 2028 maturity at roughly 9.00/05 percent, while the 15 September 2029 bond was trading near 9.42/47 percent. The 01 July 2030 bond was reported at 9.55/56 percent, a small decline from earlier prints, and the 15 December 2032 issue was quoted at about 10.20/22 percent. Telegraphic transfer rates showed the US dollar trading at 301.1000 for buying and 308.1000 for selling; the British pound and euro were also quoted with modest spreads, reflecting cautious offshore demand. The Colombo Stock Exchange traded lower in tandem with the cautious currency tone; the All Share Price Index slipped by 0.32 percent, down 76.72 points at 23,582, while the S&P SL20 fell 0.48 percent to 6,526, a decline of 31.24 points. Analysts said the simultaneous appearance of a large bond auction and a slightly softer rupee contributed to a careful start among equity investors, who monitored yields and foreign exchange ranges for signals on liquidity and investor appetite. Market participants will watch auction outcomes and any commentary from fiscal or monetary authorities for guidance on near-term price direction, while importers and corporates consider hedging strategies given the current rupee range.