Sri Lanka has issued USD 15.5Bn worth of ISBs to finance the deficit. After the deterioration of the foreign currency inflows due to COVID, the yields of the ISBs hit skyrocket in March and May in the foreign exchange where the bond is trading. Very low liquidity also played a significant role to increase the yields over 90% for shorter end bonds. But the yields of ISBs are continuously coming down since the end of May, but still at a deep discount compared with the level it was trading before.
Sri Lanka Sovereign Bonds are gaining after lost its value by one third in April - May
Interest RatesSep 4, 2020