Sri Lanka rupee closes at 335.50/336 to US dollar spot on Friday, strengthening from the previous trading session, while government bond yields fell sharply across maturities following market reactions to comments made by US President Donald Trump, currency dealers said.
Sri Lanka rupee closes at 335.50/336 to US dollar spot as bond yields decline sharply
The local currency ended the day at 335.50/336.00 against the US dollar in the spot market, compared with Thursday’s close of 336.00/337.00, indicating a modest appreciation amid changing market sentiment.
Market participants also observed movements in the banking sector’s foreign exchange rates. The telegraphic transfer buying rate for the rupee against the US dollar stood at 331.6500, while the selling rate was quoted at 337.00. The euro was quoted at 381.2123 selling and 395.1293 buying, while the British pound traded at 443.7520 buying and 457.7976 selling.
The improvement in the local currency came as investors closely monitored global developments and domestic market conditions. Dealers noted that bond markets responded positively after Donald Trump’s announcement, leading to a significant decline in yields across the government securities curve.
Sri Lanka bond yields recorded notable reductions across key maturities, reflecting improved investor sentiment and increased demand for government debt instruments.
The benchmark bond maturing on February 15, 2028 closed at 11.25/11.40 percent, down from the previous day’s level of 11.65/11.80 percent. The decline suggested stronger buying interest in shorter-term sovereign securities.
Meanwhile, the bond maturing on August 1, 2030 ended at 11.90/12.05 percent, compared with 12.10/12.25 percent a day earlier. The movement highlighted a broader easing trend in the government securities market.
Longer-dated bonds also posted substantial yield declines. The bond maturing on December 15, 2032 closed at 12.25/12.40 percent, significantly lower than the previous session’s range of 12.50/13.00 percent.
Similarly, the bond maturing on March 15, 2035 finished trading at 12.65/12.95 percent, down from 13.00/13.30 percent recorded the previous day. The sharp reduction in yields reflected stronger investor appetite for longer-term debt and expectations of improved financial market conditions.
Analysts said lower bond yields generally indicate rising demand for government securities, as investors seek stable returns amid changing global economic developments. The decline across both medium- and long-term maturities suggested broad-based confidence in the fixed-income market.
The US dollar exchange rate remains a key indicator closely watched by businesses, investors and policymakers, given its influence on import costs, foreign debt servicing and overall economic stability. Movements in the rupee and bond market are often viewed together as indicators of investor confidence and liquidity conditions within the economy.
Friday’s trading session therefore reflected a combination of currency stability and stronger demand for government debt, with the rupee posting gains against the US dollar while bond yields continued their downward trajectory across the yield curve.