Sri Lanka rupee continues to depreciate, weakening to 313.50/314.50 against the US dollar in the spot market on Tuesday, while bond yields showed minor recovery amid volatile trading conditions.
Sri Lanka rupee continues to depreciate as bond yields recover slightly
The Sri Lankan currency weakened further on Tuesday, reflecting persistent pressure in the foreign exchange market. Dealers reported the rupee at 313.50/314.50 per US dollar, down from Monday’s 313.00/314.00, signaling continued depreciation. The telegraphic transfer rates for major currencies also indicated broader currency pressure, with the American dollar at 310.00 buying and 317.00 selling, the British pound at 414.31 buying and 425.61 selling, and the euro at 356.83 buying and 368.25 selling.
Bond markets showed slight stabilization after recent fluctuations. A government bond maturing on 01.07.2028 was quoted at 9.50/60 percent, while the 15.12.2029 bond rose to 9.80/85 percent from 9.70/80 percent. Longer-dated bonds also saw modest gains, with the 01.06.2033 bond moving to 10.80/95 percent from 10.60/85 percent. Traders noted that these movements indicated cautious optimism as investors adjusted positions amid market volatility.
Equity markets, however, reflected ongoing uncertainty. The Colombo Stock Exchange recorded losses, with the All Share Price Index down 3.61 percent at 21,100.98, while the S&P SL20 fell 3.84 percent, or 218.24 points, closing at 5,905.06. Analysts noted that currency depreciation and investor caution regarding global and domestic economic conditions contributed to the decline in equity prices.
Market observers are monitoring both the foreign exchange and bond markets closely, as the performance of the Sri Lanka rupee directly impacts trade, corporate finance, and investor sentiment. With bond yields showing tentative recovery, attention remains on government policies and external developments that could influence currency stability and market confidence.