Buying interest emerges post auction

By First Capital Research
The secondary market yield curve experienced increased buying interest reversing the selling pressure observed in the previous sessions. 
The market saw moderate levels of activity following the T-bond auction held on September 12, 2024, which prompted increases in buying interest as a total of Rs.246.0 billion was accepted from Rs.290.0 billion offered. Buying interest centred around bond auction yields and the three-month bills. The belly end of the curve saw heightened interest with 15.06.29 trading between rates of 13.85 percent - 13.65 percent Similarly, 15.02.28 traded between rates of 13.65 percent - 13.58 percent. Notably, the short end of the curve displayed mixed activities as 01.05.27 traded at a rate of 13.00 percent. Additional activity was noted in the T-bills market, with the three-month bill trading in large volumes within a rate range of 10.30 percent - 10.20 percent. 
On the external front, the Sri Lankan rupee depreciated against the US dollar, closing at 301.80/US dollar compared to 300.77/US dollar recorded the previous day. Meanwhile, the Central Bank holdings of government securities declined, closing at Rs.2,523.92 billion yesterday. Overnight liquidity in the banking system contracted to Rs.38.58 billion from Rs.85.51 billion recorded the previous day.