MP tops Rs 3 trillion for 2nd time

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 Government of Sri Lanka’s (GoSL) demand pull inflationary face value money printing (FVMP) debt increased by Rs 4,326 million on Wednesday (6), due to a perennial lack of revenue.

Consequently, GoSL’s FVMP debt as a whole increased by  1.06 per cent (Rs 31,755.04 million) to Rs 3,025,057.15 million (Rs 3.0251 trillion) on Wednesday, being only the second time that GoSL’s FVMP debt has crossed the three trillion-rupee mark. The first time it crossed three trillion rupees was on 28 June (last Tuesday), with a figure of Rs 3.16 trillion.

Subsequently, the country’s foreign reserves bled by USD 76.24 million (Rs 27,429.04 million) led by the settlement in respect of  payments made in relation to ‘essential’ imports on Wednesday.  Conversions are based on the administered ‘spot’ value as at Monday which was Rs 359.79 to the US dollar.

GoSL’s MP borrowing costs (BCs) relative to the increase in its FVMP debt accelerated by 102 per cent (Rs 107,095.68 million) to Rs 212,091.80 million on Wednesday due to selling pressure of Treasury (T) Bills and T Bonds to reinvest in the day’s Rs 70 billion T Bill auction for higher returns, where weighted average yields across the board increased by over 400 basis points.  The Market was short for a record 201 market days to Wednesday, though this shortfall decreased by 0.67 per cent (Rs 4,326 million) to 645,753 million,  Central Bank of Sri Lanka (CBSL)  data showed. GoSL’s highest to the 205th highest FVMP debt has been registered for a record 205 market days to Wednesday. GoSL’s FVMP debt has been over two trillion rupees for a record 111 consecutive market days to Wednesday due to an almost perennial lack of revenue.

By Paneetha Ameresekere