Money printing hits Rs 3.1957 trillion

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Government of Sri Lanka’s (GoSL) demand pull inflationary face value money printing (FVMP) debt increased by 0.41 per cent (Rs 13,142.01 million) on Thursday (1 September), thereby increasing its total FVMP debt to Rs 3,205,962.49 million (Rs 3.206 trillion), thus registering its second highest FVMP debt value due to a persistent lack of revenue. The previous second highest FVP debt of Rs 3.1957 trillion took place only on Tuesday (30 August), while its highest of Rs 3.25 trillion took place on 8 July 2022.

The country’s foreign reserves were uplift for the second consecutive market day to Thursday, with Thursday’s figure being US$ 4.34 million (Rs 1,568.4 million), thereby uplifting total reserves by $ 20.31 million (Rs 7,335.4 million) in the review period, led by the settlement of receipts obtained in respect of exporter conversions and remittances.

Government of Sri Lanka’s at least theoretical money printing borrowing costs (MPBCs) relative to the increase in its FVMP debt accelerated by 1.88 per cent (Rs 2,559.66 million) to Rs 138,694.84 million on Thursday due to selling pressure of Treasury (T) Bills and T Bonds in secondary market trading, to reinvest in the coming Wednesday’s (7 September) Rs 75 billion T Bill auction on expectations of higher yields, led by record high inflation.

Market was short for a record 242 market days to  Thursday, though this shortfall decreased for the second consecutive market day, with Thursday’s fall being by 2.41 per cent (Rs 14,711 million) to Rs 594,447 million, nonetheless causing  sustained rate pressure.

GoSL’s FVMP debt has been over three trillion rupees for a record consecutive 40 market days to Thursday due to a sustained lack of revenue.  Also, GoSL’s highest to the 245th highest FVMP debt has been registered for a record 245 market days to Thursday.

By Paneetha Ameresekere