Mixed sentiment keeps yield curve broadly unchanged

The secondary market yield curve remained largely unchanged yesterday as trading activity stayed subdued and volumes remained low, resulting in mixed movements across maturities.

At the shorter end of the curve, the 15.10.2029 and 15.12.2029 maturities were traded between 10.75% and 10.85%. Meanwhile, the 01.08.2030 and 15.10.2030 maturities changed hands within the range of 11.12% to 11.20%.

In the 2031 segment, the 01.02.2031 maturity traded at 11.25%, while the 15.12.2032 maturity was recorded at 11.70%. Further along the curve, the 15.01.2033 and 01.11.2033 maturities traded at 11.75% and 11.85%, respectively.

The 15.06.2034 and 15.09.2034 maturities traded within a range of 12.00% to 12.05%, while the 15.06.2035 maturity was recorded at 12.10%.

In the foreign exchange market, the Sri Lankan rupee recorded a marginal appreciation against the US dollar, moving to LKR 330.70 per USD from LKR 330.83 per USD previously.

Liquidity within the banking system also increased, reaching LKR 355.13 billion compared to LKR 338.66 billion recorded earlier.

Meanwhile, Sri Lanka’s external current account registered a surplus of USD 133.4 million in August 2026, reversing four consecutive months of deficits. The improvement was largely attributed to a narrowing trade deficit, supported by lower expenditure on imports.

Despite the monthly improvement, the current account remained in a cumulative deficit of USD 290.6 million for the January to August 2026 period, highlighting continued pressure on the country’s external sector amid the escalation of the conflict in the Middle East.

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