Holdings have dropped for two straight weeks and are now about LKR 16.5 billion below the mid-September peak, though they remain above mid-August levels.
Foreign investors’ holdings of Sri Lankan government securities fell 4.45% in the week to September 24, to LKR 196.9 billion from LKR 206.1 billion a week earlier, according to the latest available data.
It was the second consecutive weekly decline. Holdings had reached LKR 213.4 billion on September 10, so the latest reading is about LKR 16.5 billion, or 7.7%, below that level. The September 17 reading of LKR 206.1 billion was itself 3.4% lower than the peak.
The retreat follows a steady build-up through August and early September. Holdings stood at LKR 194.2 billion on August 13 and rose to LKR 202.5 billion a week later. They climbed to LKR 210.6 billion by August 25 and held near that level into early September. The latest figure remains LKR 2.7 billion, or about 1.4%, above the mid-August starting point.
Foreign holdings make up a small share of the market. Total outstanding government securities stood at LKR 18.85 trillion, made up of about LKR 16.49 trillion in Treasury bonds and LKR 2.36 trillion in Treasury bills. On those figures, foreign investors hold roughly 1% of the stock. The total outstanding stock changed by only 0.02% over the week.
Secondary market yields were broadly unchanged on October 1. Treasury bonds maturing in 2029 traded between 10.75% and 10.85%, and those maturing in 2035 at about 12.10%. At the September 30 Treasury bill auction, the 91-day, 184-day and 364-day rates rose by 5, 4 and 2 basis points to 9.25%, 9.41% and 9.95%.
The data does not show which securities were sold or why, and it does not cover the days since September 24.
Key Numbers
| Indicator | Figure |
|---|---|
| Foreign holdings, September 24 | LKR 196.9 Bn |
| Week-on-week change | -4.45% (from LKR 206.1 Bn) |
| Peak reading, September 10 | LKR 213.4 Bn |
| Change from peak | -LKR 16.5 Bn (about -7.7%) |
| Reading on August 13 | LKR 194.2 Bn |
| Total outstanding government securities | LKR 18.85 Tn (-0.02% week on week) |
| Foreign share of outstanding stock (approx.) | about 1% |
Business Impact
Foreign holdings of government securities are one of the indicators treasury teams, importers and exporters watch for signs of external demand for rupee assets. Two weeks of decline is worth tracking, but the holdings are small relative to the market and remain above their mid-August level. Businesses with foreign currency exposure will want to see whether the trend continues in the next data releases, and whether it shows up in the rupee or in yields. Neither moved materially in the latest session.
This article reports market data and does not constitute investment advice.
Source Attribution: Central Bank of Sri Lanka statistics and publicly available market information.