Money printing hits new record of Rs 2.793T

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Government of Sri Lanka’s (GoSL’s) face value money printing (FVMP) debt increased by Rs 10,536 million (0.38 per cent) to a new record high of Rs 2,792,667.18 million (Rs 2.7927 trillion) on Tuesday (10) before being deflated by Rs 22,835 million (0.82 per cent) to Rs 2,769,832.18 million (Rs 2.7698 trillion) the following day Wednesday (11), Central Bank of Sri Lanka’s (CBSL’s) Wednesday’s data showed.

Prior to Tuesday, the previous MP record was Rs 2.787 trillion established on 28 April.

 Led by swap settlements and/or GoSL’s foreign debt servicing commitments to multilateral development agencies and/or making ‘essential’ imports, the country’s foreign reserves were drained by US$ 48.60 million (Rs 17,728.96 million) on Wednesday.

Market’s net shortfall decreased Rs 5,106.04 million ( 0.73 per cent) to Rs 697,219 million on Wednesday, while GoSL’s MP borrowing costs (BCs) recorded  a figure of Rs 121,850.43 million on Wednesday. It’s not possible to record changes to MPBCs as at Wednesday as CBSL in its open market operations (OMO) data for Tuesday hasn’t given the book value of CBSL’s Treasury (T) Bill and T Bond holdings. CBSL lacks transparency in its OMO operations.

GoSL’s FVMP debt has been over two trillion rupees for a record 73 days to Wednesday due to a lack of GoSL revenue. The market has been short for a record 163 days to Wednesday. GoSL’s highest to the 167th highest FVMP debt has been registered for a record 167 market days to Wednesday.

GoSL’s FVMP debt is equivalent to the totality of CBSL’s T Bill and T Bond holdings. MP is the exclusive right of CBSL.

By Paneetha Ameresekere