Secondary Bond market remains stagnant

Money market liquidity improves; Rupee depreciates

- BY WEALTH TRUST SECURITIES

THE Secondary Bond market remained largely quiet last week, with yields holding broadly steady.

Traders adopted a cautious, wait-and-see stance from early in the week ahead of the fourth Monetary Policy Review on Wednesday (23 July), keeping the market in consolidation mode.

At its fourth Monetary Policy Review for 2025, the CBSL held the Overnight Policy Rate at 7.75%, following a 25-bps cut in May. Accordingly, the SDFR and SLFR remained at 7.25% and 8.25%, while the SRR was unchanged at 2.00%. The policy outcome, widely anticipated and largely priced in, left overall market dynamics largely unchanged, with trading confined to a few selected maturities.

Overall, the week was characterised by thin volumes and limited price action. Bond yields remained anchored broadly around prevailing levels, albeit drifting down marginally at the latter part of the week.