Money printing hits new record of Rs 3.3T

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Government of Sri Lanka’s (GoSL’s) demand-pull inflationary face value money printing (FVMP) debt increased by Rs 22,133 million on Thursday (15 September), thereby boosting GoSL’s FVMP debt to a new record high Rs 3,314,404.69 million (Rs 3.3144 trillion) due to a persistent lack of revenue.

It was only on the previous day, Wednesday; GoSL’s FVMP debt hit a new high then, a value of Rs 3.2607 trillion. The overall increase in GoSL’s FVMP debt on Thursday was Rs 53,677.28 million, up 1.65 per cent over Wednesday’s value. GoSL’s FVMP debt has been over Rs three trillion for a record consecutive 50 market days to Thursday.

Thursday also saw the country’s foreign reserves hemorrhage for the second consecutive market day, with Thursday’s figure alone being US$ 87.07 million (Rs 31,544.28 million), thereby upping such bleeding in the two-market day period to Thursday to US$ 163.23 million (Rs 62,752.28 million), led by the settlement of payments made in relation to ‘essential’ imports.

The market was short for a record 252 market days to Thursday, though this shortfall decreased by 3.96 per cent
(Rs 22,133 million) to Rs 537,209 million, nevertheless causing sustained rate pressure. Further, GoSL’s at least. theoretical MP borrowing costs (BCs) increased by 8.35 per cent (Rs 12,969.15 million) to Rs 168,301.14 million on Thursday, due to selling pressure of Treasury (T) Bills and T Bonds in secondary market trading led by profit taking.  GoSL’s highest to the 255th highest FVMP debt has been recorded in the 255 consecutive market days to Thursday.

By Paneetha Ameresekere