The country’s foreign reserves bled for the third consecutive market day to Friday ( 29 July), with Friday’s value alone being US$ 118.50 million (Rs 42,780 million), thereby increasing such haemhorraging to US$ 198.76 million in the review period led by the settlement of payments in relation to making ‘essential’ imports.
Government of Sri Lanka’s (GoSL’s) non-demand pull inflationary face value money printing (FVMP) debt increased for the third consecutive market day to Friday, with Friday’s increase being by 0.60 per cent (Rs 18,678.24 million) to Rs 3,145,784.78 million (Rs 3.1458 trillion), due to a perennial lack of revenue. GoSL’s FVMP debt has been over Rs three trillion for a record consecutive 17 market days to Friday.
GoSL’s at least theoretical MP borrowing costs (BCs), relative to the increase in its FVMP debt, accelerated by 4.43 per cent (Rs 5,783.36 million) to Rs 136,241.57 million, led by selling pressure of Treasury (T) Bills and T Bonds in secondary market trading, to reinvest in Wednesday’s (3 August) Rs 87.50 billion T Bill auction with expectations of higher returns, led by Colombo’s inflation accelerating to a record high 60.8 per cent last month (July).
Market was short for a record 219 market days to Friday, with this shortfall increasing for the third consecutive market day, with Friday’s increase being by 4.22 per cent (Rs 24,102 million) to 595,388 million, thereby virtually causing perpetual rate pressure. GoSL’s highest to the 222nd highest FVMP debt has been registered for a record 222 market days to Friday.
By Paneetha Ameresekere