Government of Sri Lanka’s (GoSL’s) face value money printing (FVMP) debt increased for the second consecutive market day to Thursday, increasing by 0.32 per cent (Rs 9,004 million) to reach its fourth highest figure of Rs 2,842,398.71 million (Rs 2.8424 trillion) due to a sustained lack of revenue. This increase was however non-demand pull inflationary as it was used to meet external commitments on Thursday ( 2 June).
Despite this increase in MP, GoSL’s MP borrowing costs (BCs) fell for the second consecutive market day to Thursday, decreasing by 0.94 per cent (Rs 1,121.50 million) this time, to Rs 117,865.15 million due to sustained buying pressure of riskless, low returns Treasury (T) Bills and T Bonds because of perennial uncertainty, rather than invest in the high returns private sector, the engine of growth.
Market’s net shortfall increased for the third consecutive market day to Thursday, this time by 0.97 per cent (Rs 6,432 million) to Rs 671,397 million, led by a liquidity fall of Rs 15,436 million (US$ 42.79 million) during the course of trading caused by the settlement of paying for “essential” imports after buying US dollars from the country’s foreign reserves. Conversions are based on the administered benchmark “spot” value of Rs 360.76 to the US dollar as at Monday.
GoSL’s FVMP debt has been over Rs two trillion for a record 88 consecutive market days to Thursday due to an almost perennial lack of revenue. The market has been short for a record 178 market days to Thursday. GoSL’s highest to the 182nd highest FVMP debt has been registered for a record 182 market days to Thursrday.
By Paneetha Ameresekere