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Daily report for the 22nd July 2025- Courtesy Wealth Trust Securities Ltd
- Bond Yields Remains Steady Ahead of Monetary Policy Announcement
- Rs 111.00 Bn T-Bill Auction in Focus
Secondary bonds market yields remained steady yesterday as most market participants adopted a wait-and-see approach ahead of the 4th Monetary Policy Review for 2025, scheduled to be announced on today (23rd July) at 7:30 a.m.
For context at its 3rd Monetary Policy Review for 2025 on 22nd May, the Central Bank of Sri Lanka cut the Overnight Policy Rate by 25 basis points to 7.75%—the first reduction since its introduction in November 2024. Accordingly, the SDFR and SLFR were also lowered by 25 basis points to 7.25% and 8.25%, respectively. The Statutory Reserve Ratio remained unchanged at 2.00%.
Limited trades were observed on the 15.10.28 and 15.10.29 maturities at the rates of 9.02%-9.00% and 9.45%.
This comes ahead of the Treasury bill auction due today. The auction will have on offer a total amount of Rs. 111.00 billion on offer, an increase of Rs 26.00 billion over the previous week. This will consist of Rs. 26.00 billion on the 91-day maturity, Rs 50.00 billion on the 182-day and Rs. 35.00 billion on the 364-day maturity.
For reference the weekly Treasury bill auction conducted last Wednesday (16/07/25) the weighted average yield rates increased across all three tenors for the second consecutive week. The 91-day yield rose by 2 basis points to 7.62%, the 182-day by 7 basis points to 7.91%, and the 364-day by 5 basis points to 8.04%. However, the auction was fully subscribed at the first phase of competitive bidding, successfully raising the total offered amount of Rs. 85.00 billion.
The total secondary market Treasury bond/bill transacted volume for 21st July was Rs. 4.86 billion.
In money markets, the weighted average rates on overnight call money and Repo stood at 7.79% and 7.81% respectively.
The net liquidity surplus was recorded at Rs. 98.38 billion yesterday. An amount of Rs. 3.64 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.25%, while an amount of Rs. 102.02 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 7.25%.
Forex Market
In the Forex market, the USD/LKR rate on spot contracts closed the day appreciating slightly to Rs. 301.70/301.75 as against 301.75/301.85 the previous day.
The total USD/LKR traded volume for 21st July was US $ 32.90 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)