Commitments Exceeded by Rs 12,465M
By Paneetha Ameresekere
Central Bank of Sri Lanka (CBSL) last Friday (26 November) announced that it will be issuing Rs 60,000 million worth of Treasury (T) Bills on Wednesday
(1 December) which will be in excess by 26.22 per cent (Rs 12,465 million) compared to maturing T Bills (Rs 47,535 million) which will have to be repaid by Friday (3 December) the latest.
However, amid a high inflationary environment an excessive amount of T-Bills to be issued to the market on Wednesday, over and above that which has to be repaid will cause further rate pressure.
Meanwhile, the splits of the Rs 60,000 million worth of T-Bills which will be issued on Wednesday are Rs 18,000 million worth of 91-day maturities, Rs 20,000 million worth of 182-day maturities and Rs 22,000 million worth of 364-day maturities.
And the splits of the Rs 47,535 million worth of T-Bill maturities which will have to be repaid by Friday are Rs 23,336 million worth of 91-day maturities, Rs 10,905 million worth of 182-day maturities and Rs 13,294 million worth of 364-day maturities.
Issuing of T-Bills is one of the popular ways that the Government of Sri Lanka (GoSL) raises money from the domestic market to meet its monetary commitments. Investing in T-Bills are risk free, because in the event GoSL is unable to honour such debt, CBSL is mandated to print rupees, which action however is inflationary by nature, to repay such creditors. CBSL is the sole, mandated authority in the country to print money. CBSL is also the steward of GoSL debt.