Reserves haemorrhage $ 295M

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The country’s foreign reserves bled for the second consecutive market day to Friday, with Friday’s figure being US$ 198.52 million (Rs 71,644.99 million), thereby increasing such net foreign outflows in total to US$ 295.43 million in the review period led by the repayment for  foreign debt servicing commitments. Nonetheless, Central Bank of Sri Lanka (CBSL) lacks transparency in its open market operations.

Government of Sri Lanka’s (GoSL’s)  non-demand pull inflationary face value money printing (FVMP) debt increased by 2.04 per cent ( Rs 62,452.99 million), thereby increasing its FVMP debt as a whole to Rs 3,122,011.10 million (Rs 3.1220 trillion) on Friday because of a perennial lack of revenue. Market was short for a record 208 market days to Friday, with this shortfall increasing by 1.79 per cent (Rs 9,192 million) to 521,760 million, thereby virtually causing perpetual rate pressure. GoSL’s at least theoretical MP borrowing costs (MPBCs) relative to the increase in its FVMP debt accelerated by 16.27 per cent (Rs 20,815.49 million) to Rs 148,729.27 million on Friday due to  selling pressure of  Treasury (T) Bills and T Bonds by investors in secondary market trading, to reinvest in Wednesday’s  Rs 55 billion T Bill auction on expectations of better returns because of a near 100 per cent inflation. 

GoSL’s FVMP debt has been over Rs three trillion for a record seventh consecutive market day to Friday due to inadequate revenue. GoSL’s highest to the 212th highest FVMP debt has been registered for a record 212 market days to Friday. GoSL’s FVMP debt has been over Rs two trillion for a record 118 consecutive market days to Friday because of an almost perennial lack of revenue.

By Paneetha Ameresekere