Sri Lanka rupee closes at 336.00/20 to US dollar spot remained unchanged in the spot market on Tuesday, while government bond yields moved higher across most maturities ahead of this week’s Treasury securities auction.
Sri Lanka rupee closes at 336.00/20 to US dollar spot as bond yields edge higher
The local currency ended the trading session at 336.00/20 per US dollar in the spot market, with dealers reporting a largely stable exchange rate despite rising yields in the government securities market. Market participants continued to monitor liquidity conditions and investor sentiment as the government prepared to raise fresh funds through a Treasury bill auction scheduled for July 15.
In the foreign exchange market, the Central Bank’s indicative telegraphic transfer rates showed the US dollar quoted at 331.5000 buying and 340.5000 selling. The euro was quoted at 375.1252 buying and 389.0422 selling, while the British pound stood at 441.8372 buying and 455.8828 selling.
Although the exchange rate remained steady, activity in the government securities market reflected a modest upward movement in borrowing costs. Sri Lanka bond yields increased across several medium- and long-term maturities, suggesting investors continued to seek higher returns ahead of the government’s latest debt issuance.
The bond maturing on 15 September 2027 closed at 10.35/10.50 percent, slightly higher than the previous session’s 10.30/10.45 percent. Meanwhile, the 1 May 2028 maturity remained unchanged at 10.60/10.70 percent, making it one of the few securities to end the day without any movement.
Further along the yield curve, the bond maturing on 15 December 2029 closed at 11.10/11.30 percent, up from 11.05/11.15 percent. The 15 May 2030 bond rose to 11.50 percent from 11.30/11.40 percent, while the 1 August 2030 maturity climbed to 11.48/11.55 percent from 11.40/11.45 percent.
The 15 October 2030 bond also recorded gains, ending at 11.56/11.60 percent, compared with 11.50/11.55 percent in the previous session. Longer-dated securities continued the upward trend, with the 15 December 2032 bond closing at 11.75/11.85 percent, while the 15 January 2033 maturity increased to 11.80/11.90 percent.
Similarly, the bond maturing on 1 November 2033 ended at 11.85/11.95 percent, compared with 11.75/11.85 percent previously. The longest maturity quoted during the session, due on 15 June 2034, rose to 12.00/12.05 percent, marking one of the strongest increases of the day after closing at 11.80/11.90 percent in the previous trading session.
The rise in yields comes ahead of the government’s planned Treasury bill auction, where the authorities are expected to issue Rs. 120,000 million worth of Treasury bills on July 15. Investors will closely monitor demand and accepted yields at the auction, as the results are likely to provide fresh signals on domestic liquidity conditions and market expectations for interest rates.
Currency traders noted that while the Sri Lanka rupee closes at 336.00/20 to US dollar spot reflected stability in the foreign exchange market, movements in government securities suggested cautious positioning by investors. Bond market activity often provides an indication of expectations surrounding inflation, liquidity and future monetary policy.
The outcome of the upcoming Treasury bill auction will therefore be watched closely by banks, institutional investors and market participants for indications of funding costs and investor appetite. Together with developments in the foreign exchange market, these indicators will remain important benchmarks for assessing Sri Lanka’s broader financial market conditions in the days ahead.