Sri Lanka rupee at 336.30/50 to US dollar spot was quoted in the foreign exchange market on Tuesday, while government bond yields moved slightly higher following the latest debt auction and ahead of this week’s Treasury bill issuance.
Sri Lanka rupee at 336.30/50 to US dollar spot as bond yields edge higher ahead of T-bill auction
The local currency was quoted at 336.30/50 against the US dollar in the spot market on Tuesday, compared with 336.00/20 recorded on the previous trading day, according to market dealers. The modest movement reflected continued stability in the foreign exchange market, even as government securities experienced slightly higher yields.
The bond market saw yields edge up after the government conducted a bond auction on Monday, selling 15 billion rupees worth of Treasury bonds across 2030, 2034 and 2037 maturities. The auction came as investor attention remained focused on government borrowing requirements and interest rate expectations.
Among actively traded securities, the bond maturing on 1 August 2030 was quoted at 11.50/55 percent, up from 11.40/45 percent in the previous session. The 15 October 2030 bond also recorded a slight increase, quoted at 11.55/60 percent, compared with 11.50/55 percent earlier.
Further along the yield curve, the 1 November 2033 bond was quoted at 11.80/85 percent, compared with 11.75/85 percent previously. Meanwhile, the 15 June 2034 maturity rose to 11.95/12.05 percent, from 11.80/90 percent, indicating a more noticeable upward adjustment in yields.
The 15 October 2034 Treasury bond was quoted at 12.00/08 percent, while the longer-dated 1 July 2037 bond traded at 12.58/62 percent, reflecting continued investor demand for longer-term government securities despite slightly firmer yields.
The movement in Sri Lanka bond yields follows recent government borrowing activity aimed at financing public expenditure through the domestic debt market. Changes in bond yields are closely monitored by investors as they provide insight into market expectations for interest rates, inflation and overall liquidity conditions.
Currency dealers said the Sri Lanka rupee at 336.30/50 to US dollar spot continued to trade within a relatively stable range, with only marginal changes from the previous day. The exchange rate has remained comparatively steady in recent weeks, supported by improved foreign exchange liquidity and disciplined monetary policy.
Market participants are now looking ahead to the next government borrowing exercise. The Central Bank has scheduled a Treasury bill auction for 15 July, where 120 billion rupees worth of Treasury bills will be offered to investors. The auction is expected to attract strong participation from banks and institutional investors seeking short-term government securities.
The outcome of the Treasury bill auction will be watched closely for indications of investor appetite and prevailing market liquidity. Any significant changes in accepted yields could also influence pricing across the broader government securities market in the coming days.
For now, the Sri Lanka rupee at 336.30/50 to US dollar spot remains broadly stable, while government bond yields continue to adjust modestly as investors assess market conditions and upcoming debt issuance.