Sri Lanka rupee weakened against the US dollar in the spot market on Thursday as government bond yields moved higher across several maturities, reflecting cautious sentiment in the local financial market.
Sri Lanka rupee slips against the US dollar as government bond yields rise
The Sri Lanka rupee was quoted at 336.65/75 against the US dollar in the spot market on Thursday, weakening from 336.00/30 recorded on the previous trading day, according to market dealers. The movement came alongside an increase in yields on government securities, indicating softer demand for bonds during the session.
In the foreign exchange market, the telegraphic transfer (TT) rate for the US dollar exchange rate stood at 331.50 for buying and 340.50 for selling. Meanwhile, the euro was quoted at 376.2676 selling and 390.1846 buying, while the British pound traded at 443.1308 buying and 457.1764 selling.
Activity in the government securities market saw yields edge higher across medium- and long-term maturities. The bond maturing on 1 March 2030 was quoted at 11.20/30 percent.
The 1 August 2030 government bond was quoted at 11.38/45 percent, compared with 11.30/35 percent at the previous close. Similarly, the 15 October 2030 bond increased to 11.45/50 percent, up from 11.36/40 percent.
Longer-dated securities also registered gains in yields. The bond maturing on 15 December 2032 was quoted at 11.70/75 percent, rising from 11.60/70 percent a day earlier. The 1 November 2033 bond climbed to 11.75/85 percent, compared with 11.70/80 percent previously.
Higher Sri Lanka bond yields generally indicate lower bond prices, as investors seek increased returns amid changing market expectations. Market participants continue to monitor movements in the foreign exchange market, domestic liquidity conditions and global economic developments for signals that could influence the direction of both the currency and government securities.
The latest trading session reflects continued fluctuations in Sri Lanka’s financial markets, with the Sri Lanka rupee remaining under mild pressure against the US dollar while government bond yields continue to adjust across the yield curve.