Two- and three-year yields rose 8 basis points in a day, though most longer maturities remain lower than a week ago, in thin secondary market trading.
Sri Lankan government bond yields rose modestly at the shorter end of the curve, though the moves were small and trading was thin.
The yield on the two-year benchmark (maturing October 2028) rose 8 basis points from the previous day to an indicative 10.68%. The three-year benchmark (September 2029) also rose 8 basis points to 10.98%. The four- and seven-year benchmarks added 5 basis points each, and the eight-year added 3. The remaining six bond tenors, including the five-year at 11.40% and the ten-year at 12.18%, were unchanged on the day.
Against a week ago, the picture is mostly lower. Only the two- and three-year yields are higher, each by 3 basis points. The ten-year is unchanged, and the other eight bond tenors are lower, led by the five-year (down 10 basis points) and the eight- and thirteen-year benchmarks (each down 8 basis points). The curve therefore ended the day only slightly changed from September 29, with the thirteen-year at 12.23%, roughly three percentage points above the 91-day Treasury bill.
Among trades recorded in the secondary market, bonds maturing in August and October 2030 changed hands at yields between 11.25% and 11.35%, and a February 2031 maturity traded at 11.35%. In the longer segment, bonds maturing in June and October 2034 traded at 12.05%.
Treasury bill yields were unchanged from the previous day at 9.20% (91-day), 9.45% (182-day) and 9.90% (364-day). At the most recent primary auction on September 30, accepted yields rose by 2 to 5 basis points to 9.25%, 9.41% and 9.95% respectively.
Government securities outstanding total about LKR 18.87 trillion, of which Treasury bonds make up roughly LKR 16.49 trillion and Treasury bills LKR 2.38 trillion.
Business Impact
Government yields act as benchmarks for pricing bank lending and corporate debt, so sustained moves in them eventually feed into borrowing costs. A day-on-day rise of up to 8 basis points does not change that picture, and the lower weekly readings across most maturities point to broadly stable conditions. Businesses planning borrowing or investing in fixed-income products may want to watch whether the shorter-end increase extends to other maturities.
Key Numbers
| Tenor (indicative) | Yield | Change vs previous day | Change vs last week |
|---|---|---|---|
| 91-day T-bill | 9.20% | Unchanged | -5 bps |
| 364-day T-bill | 9.90% | Unchanged | -5 bps |
| 2-year bond | 10.68% | +8 bps | +3 bps |
| 3-year bond | 10.98% | +8 bps | +3 bps |
| 5-year bond | 11.40% | Unchanged | -10 bps |
| 8-year bond | 12.03% | +3 bps | -8 bps |
| 10-year bond | 12.18% | Unchanged | Unchanged |
| 13-year bond | 12.23% | Unchanged | -8 bps |
Source Attribution: Central Bank of Sri Lanka statistics and publicly available market information.