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CBSL holds OPR unchanged at 8.75%

By First Capital Research

Yesterday, the Central Bank of Sri Lanka (CBSL) announced its decision to maintain the Overnight Policy Rate (OPR) at 8.75 percent.

The decision reflects the impact of the proactive monetary policy tightening implemented in May 2026, alongside other measures whose effects have largely materialised.

The CBSL also considered heightened uncertainty arising from geopolitical tensions in the Middle East and potential economic risks associated with the El Niño conditions.

The secondary market initially witnessed buying interest, which later shifted towards selling amid profit-taking activity. Against this backdrop, market activity remained moderate, with the yield curve edging slightly lower compared to yesterday.

Among the trades recorded yesterday, at the short end, 01.08.2030 traded between 11.00 percent to 11.15 percent, while 15.10.2030 traded between 11.05 percent and 11.20 percent.

Within the 2031 segment, 01.02.2031 traded between 11.10 percent and 11.15 percent, while 01.12.2031 traded at 11.45 percent. Meanwhile, 15.12.2032 traded between 11.60 percent and 11.75 percent.

In the 2033 segment, 15.01.2033 traded at 11.75 percent, while 01.11.2033 traded at 11.85 percent. Finally, within the 2034 segment, 15.06.2034, 15.09.2034 and 15.10.2034 traded within the range of 11.90 percent and 12.00 percent.

Yesterday, the PDMO concluded its weekly T-bill auction, raising Rs.80.0 billion, in line with the total amount offered. For the three-month T-bill, Rs.35.0 billion was initially offered, while Rs.41.9 billion was accepted.

The weighted average yield rate (WAYR) increased by 5bps to 9.25 percent. For the six-month T-bill, the PDMO accepted Rs.28.9 billion against an offered amount of Rs.25.0 billion, with the WAYR rising by 4bps to 9.41 percent. For the 12-month T-bill, Rs.9.2 billion was accepted, which was below the offered amount, while the WAYR increased by 2bps to 9.95 percent.

On the external front, the Sri Lankan rupee depreciated marginally against the US dollar, standing at Rs.330.83/US dollar, compared to Rs.330.79/US dollar seen earlier. Market liquidity in the banking system contracted to Rs.338.66 billion, compared to Rs.369.35 billion recorded previously. The CCPI-based headline inflation for September 2026 stood at 8.0 percent year-on-year, unchanged from the previous month.