Reserves bleed US$ 30M

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The country’s foreign reserves haemorrhaged by US$ 30.14 million (Rs 10,896 million) in the three market days to  Thursday (8) led by the settlement payments made for ‘essential’ imports.

The country’s  face value money printing (FVMP) debt decreased by 0.06 per cent (Rs2,049 million) to Rs 3,219,442.89 million (Rs 3.2194 trillion) on Thursday, marginally mitigating demand-pull inflationary pressure. Government of Sri Lanka’s (GoSL) highest to the 250th highest FVMP debt has been registered for a record 250 market days to Thursday.

Nonetheless, GoSL’s at least theoretical MP borrowing costs (BCs) increased  by 1.42 per cent (Rs 2,111.61 million) to Rs 150,651.34 million on Thursday   due to  selling pressure of Treasury
T Bills and T Bonds in secondary market trading, led by profit taking.

 Market was short for a record 247 market days to Thursday, with this shortfall  increasing by 1.18 per cent (Rs 6,762 million) to Rs 582,217 million, thereby causing  sustained rate pressure. GoSL’s FVMP debt has been over three trillion rupees for a record consecutive 45 market days to Thursday due to a sustained lack of revenue.

Transactions between the CBSL and the GoSL are foreign reserves neutral and CBSL which administers daily open market operations; lacks transparency. GoSL’s FVMP debt is equivalent to the totality of CBSL’s T Bill and T Bond holdings. MP is the exclusive right of CBSL.  GoSL’s MPBCs are prorated to the outcome in secondary market trading of T Bills and T Bonds on the reference day.

By Paneetha Ameresekere