Panic buying in Treasuries continues for fifth day

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Government of Sri Lanka’s (GoSL’s) money printing borrowing costs (MPBCs) fell for the fifth consecutive market day to Friday, declining by 1.23 per cent (Rs 1,343.85 million) to Rs 107,706.52 million over its Thursday’s figure due to sustained buying pressure of riskless, low returns Treasury (T) Bills and T Bonds in secondary market trading because of perennial uncertainty, rather than investing in the high returns private sector, the engine of growth.

This was despite GoSL’s face value (FV) MP debt increasing  by 0.37 per cent (Rs 10,604.83 million) to  Rs 2,856,718.64 million (Rs 2.8567 trillion)  on Friday due to a sustained lack of revenue.

 Market’s net shortfall  increased by 0.15 per cent (Rs 986 million) to Rs 680,836 million, led by a liquidity haemorrhage  of Rs 11,590.83 million, thereby bleeding the country’s foreign reserves by US$ 32.19 million during the course of trading on Friday, dominated by the settlement of making payments for the import of ‘essential’ goods. Conversions are based on the administered benchmark ‘spot’ value of Rs 360.03 to the US dollar as at Wednesday.

 GoSL’s FVMP debt has been over Rs two trillion for a record 94 consecutive market days to Friday due to an almost perennial lack of revenue. The market has been short for a record 184 market days to Friday. GoSL’s highest to the 188th highest FVMP debt has been registered for a record 188 market days to Friday.

By Paneetha Ameresekere