Reserves bleed $97M

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The country’s foreign reserves bled by USD 96.91 million (Rs 35,020 million) due to the payment settlement for ‘essential’ imports on Thursday (14). Conversions are based on Monday’s administered ‘spot’ value which was Rs 361.35 to the US dollar. Nonetheless, Central Bank of Sri Lanka (CBSL) lacks transparency in its open market operations.

Government of Sri Lanka’s (GoSL’s) at least theoretical money printing borrowing costs (MPBCs) fell for the third consecutive market day to Thursday, with Thursday’s decline being 2.02 per cent
(Rs 2,636.74 million) to Rs 127,913.78 million due to sustained buying pressure of riskless and relatively low returns Treasury (T) Bills and T-Bonds by investors in secondary market trading, rather than invest in the high returns private sector, the engine of growth, due to continuous uncertainty.

GoSL’s  non-demand pull inflationary face value money printing (FVMP) debt increased by 0.62 per cent ( Rs 18,822 million), thereby increasing its FVMP debt as a whole to Rs 3,059,558.11 million

(Rs 3.0596 trillion)  on Thursday because of a perennial lack of revenue.

Market was short for a record 207 market days to Thursday, with this shortfall increasing by 3.26 per cent (Rs 16,198 million) to 512,568 million, thereby virtually causing perpetual rate pressure.

GoSL’s FVMP debt has been over three trillion rupees for a record sixth consecutive market day to Thursday due to inadequate revenue. GoSL’s highest to the 211th highest FVMP debt has been registered for a record 211 market days to Thursday. GoSL’s FVMP debt has been over Rs two trillion for a record 117 consecutive market days to Thursday because of an almost perennial lack of revenue.

By Paneetha Ameresekere