Thin volumes ahead of bond auction

By First Capital Research
The secondary market yield curve remained broadly unchanged, with thin trading volumes and subdued activity as the investors opted for a wait-and-see stance ahead of the upcoming bond auction scheduled for October 28, 2024, which will offer Rs.32.5 billion in T-bonds. 
There was some selling interest observed on the short to mid end of the curve. Amongst the traded maturities, notable trades were among the 2027 and 2028 maturities. On the short end of the curve, 15.09.27 and 15.12.27, were seen trading at a rate of 11.50 percent. On the belly end of the curve, 01.05.28 traded at a rate of 11.85 percent. Additionally, 15.06.29 traded between rates of 12.05 percent - 12.08 percent and 15.10.30 traded between rates of 12.35 percent - 12.25 percent. Meanwhile, on the external front, the Sri Lankan rupee depreciated against the US dollar, closing at Rs.293.7/US dollar, compared to Rs.293.3/US dollar recorded the previous day. Similarly, the Sri Lankan rupee depreciated against other major currencies including the GBP, EUR, AUD and JPY. The Central Bank of Sri Lanka holdings of government securities remained unchanged, closing at Rs.2,515.62 billion yesterday. Overnight liquidity in the banking system expanded to Rs.156.27 billion, from Rs.153.57 billion recorded the previous day.