Sri Lanka rupee weaker, bond yields steady as the local currency depreciated slightly against the US dollar in the spot market on Tuesday, while government securities remained broadly stable, market participants said.
Sri Lanka rupee weaker, bond yields steady amid stable bond market
The rupee was quoted at 316.00/50 per US dollar, weakening from the previous day’s levels of 315.60/80, reflecting continued pressure in the foreign exchange market. Dealers indicated that demand for dollars remained firm, contributing to the marginal depreciation despite relatively stable macroeconomic conditions.
In the government securities market, bond yields showed limited movement, suggesting cautious investor sentiment. A bond maturing on December 15, 2029 was quoted at 9.97/10.02 percent, compared to 9.99/10.00 percent a day earlier. Meanwhile, a bond maturing on March 1, 2030 was quoted at 10.00/05 percent, indicating minimal change.
Further along the yield curve, the bond maturing on March 15, 2031 edged slightly higher to 10.10/20 percent from 10.05/15 percent. The bond maturing on June 1, 2033 remained unchanged at 11.00/10 percent, highlighting overall stability in long-term yields.
Market analysts note that the stability in yields reflects a balance between inflation expectations and monetary policy signals, as well as steady demand for government debt instruments. The Central Bank’s ongoing liquidity management and fiscal discipline measures continue to influence investor behavior in the bond market.
In parallel, the government is set to raise 90,000 million rupees through a Treasury bill auction, which is expected to test short-term market liquidity and investor appetite. Such auctions play a critical role in financing government operations while providing insight into prevailing interest rate trends.
Foreign exchange rates in the telegraphic transfer market showed variations across major currencies. The US dollar was quoted at 312.0500 for buying and 319.0500 for selling. The British pound traded at 411.2470 buying and 422.5504 selling, while the euro stood at 355.8677 buying and 367.2871 selling.
Equity market performance remained mixed during the session. At the Colombo Stock Exchange, the All Share Price Index (ASPI) edged up by 0.05 percent, gaining 10.58 points to reach 21,102.82. In contrast, the S&P SL20 index declined by 0.08 percent, or 4.89 points, to 5,904.07.
The marginal gains in the broader index suggest selective buying interest, while the dip in the S&P SL20 indicates pressure on large-cap stocks. Market participants continue to monitor both domestic economic signals and global financial trends for direction.
Overall, Sri Lanka rupee weaker, bond yields steady reflects a market in transition, with currency depreciation occurring alongside stable fixed-income conditions. Analysts expect continued volatility in the currency market, while bond yields may remain range-bound in the near term depending on fiscal developments and external sector dynamics.