The PDMO raised the full LKR 50 billion offered across two maturities as secondary market buying pushed government bond yields lower ahead of the sale.
Sri Lanka’s Public Debt Management Office (PDMO) raised the full amount offered at Tuesday’s Treasury bond auction, drawing solid demand across both maturities on offer.
The PDMO accepted LKR 30.0 billion through the 2030 maturity at a weighted average yield of 10.54%, and LKR 20.0 billion through the 2035 maturity at a weighted average yield of 11.70%, together raising the full LKR 50 billion targeted.
The result followed a session of active secondary market trading ahead of the auction, with particular buying interest concentrated in the 2030 and 2036 maturities. Trading volumes across the yield curve were moderate but broad-based, and yields shifted downward across several actively traded bonds during the day.
Among the maturities that changed hands, the 15 September 2029 bond traded in a range of 10.15%–10.25%. In the 2030 segment, the 1 March 2030, 1 August 2030 and 15 October 2030 bonds traded between 10.50% and 10.75%, while the 1 February 2031 maturity traded between 10.50% and 10.80%. The longer-dated 15 August 2036 bond traded in a range of 11.85%–12.00%.
Popular maturities recorded modest yield declines compared to the previous session: the 1 August 2030 and 15 October 2030 bonds each eased by 15 basis points, while the 15 August 2036 bond eased by 10 basis points.
In parallel, Tuesday’s Treasury bill auction also saw yields decline across all tenors offered, with the 91-day and 182-day bills each down 16 basis points and the 364-day bill down 2 basis points.
Banking system liquidity contracted to LKR 322.87 billion, from LKR 333.21 billion in the prior session.
Business Impact
A fully subscribed T-Bond auction, alongside broadly softer secondary market yields, points to sustained investor appetite for government rupee debt. Lower yields at the long end of the curve can ease the government’s domestic borrowing costs over time and may filter through to pricing benchmarks used across corporate and bank lending. For businesses and investors holding or considering government securities, the auction result signals continued market confidence in absorbing planned debt issuance without requiring higher yields to attract buyers.
Editorial note: While the auction outcome and yield movements are genuine positive signals for debt market conditions, no individual yield move breached the 20bps newsworthiness threshold in isolation — the story’s strength rests on the combination of full subscription plus the broader downward yield shift, not a single dramatic data point.
Key Numbers
| Metric | Value |
|---|---|
| T-Bond Auction — Total Raised | LKR 50.0Bn (fully subscribed) |
| 2030 Maturity — Amount Raised | LKR 30.0Bn |
| 2030 Maturity — Weighted Avg. Yield | 10.54% |
| 2035 Maturity — Amount Raised | LKR 20.0Bn |
| 2035 Maturity — Weighted Avg. Yield | 11.70% |
| T-Bill 91-Day Yield | 9.06% (-16bps) |
| T-Bill 182-Day Yield | 9.44% (-16bps) |
| T-Bill 364-Day Yield | 9.89% (-2bps) |
| Banking System Liquidity | LKR 322.87Bn (from LKR 333.21Bn) |
Source: Central Bank of Sri Lanka statistics and publicly available market information.