Holdings fall 3.42% week-on-week after seven consecutive weeks of steady gains
Foreign holdings of Sri Lankan government securities declined for the week ending September 17, breaking a run of steady weekly accumulation that had persisted since early August.
Holdings fell 3.42% week-on-week to LKR 206.1 billion, down from LKR 213.4 billion in the prior week. The pullback follows seven consecutive weeks of gains, during which holdings had climbed from LKR 192.9 billion in early August to a peak of LKR 213.4 billion by mid-September.
The weekly decline coincided with a session in the secondary bond market in which short- and medium-term yields eased on buying interest, while the belly of the curve, particularly bonds maturing in 2034 and 2035, saw modest selling pressure. Whether the dip in foreign holdings reflects a broader shift in offshore positioning or a single-week adjustment will depend on data from coming weeks.
Total outstanding government securities stock stood at LKR 18.86 trillion, up 0.76% week-on-week, with treasury bonds accounting for the overwhelming majority of the total at LKR 16.49 trillion, against LKR 2.37 trillion in treasury bills.
Separately, at a treasury bill auction settled during the period, yields rose across all tenors: the 91-day bill cleared at 9.18%, up 15 basis points; the 184-day bill at 9.36%, up 12 basis points; and the 364-day bill at 9.88%, up 11 basis points.
Key Numbers
| Metric | Value | Change |
|---|---|---|
| Foreign Holdings of G-Secs (latest week) | LKR 206.1 Bn | -3.42% WoW |
| Foreign Holdings (prior week) | LKR 213.4 Bn | — |
| Prior Trend | 7 consecutive weekly gains | Aug 6 – Sep 10 |
| Total Outstanding G-Secs | LKR 18.86 Tn | +0.76% WoW |
| T-Bonds Outstanding | LKR 16.49 Tn | — |
| T-Bills Outstanding | LKR 2.37 Tn | — |
| 91-Day T-Bill Yield | 9.18% | +15 bps |
| 184-Day T-Bill Yield | 9.36% | +12 bps |
| 364-Day T-Bill Yield | 9.88% | +11 bps |
Business Impact
A pause in foreign accumulation of government securities, after a sustained multi-week build-up, is a data point worth monitoring for treasury desks and institutional investors who track offshore appetite as a signal of confidence in local currency debt. On its own, a single week’s decline does not indicate a reversal, particularly against a backdrop of overall outstanding stock still growing modestly. However, the rise in treasury bill yields across all tenors at the most recent auction suggests some firming in short-term borrowing costs, which corporates and financial institutions relying on short-tenor government paper as a pricing benchmark should factor into near-term funding decisions. Continued weekly tracking will clarify whether this marks the start of a shift in foreign positioning or a temporary pause.
Source Attribution
Source: Central Bank of Sri Lanka statistics and publicly available market information.