Inflation ( CCPI)6.4% (Jan 2024)
GDP1.6% (3Q 2023)
Unemployment5.2% (2Q 2023)
3M T-Bill Rate9.79%
12M T-Bill Rate10.02%
2Y T-Bond Rate11.05%/ 11.10%
4Y T-Bond Rate12.20% / 12.30%
USD/LKR313/314
Reserves $4.5Bn (Jan 2024)
Cum. Trade Deficit $4,866 Mn (Dec 2023 cumulative)
Cum. Fiscal DeficitLKR 2,020 Bn (Nov 2023)

CBSL is easing the O/N liquidity pressures at rapid phase

Bank & FinanceJan 10, 2023
CBSL is easing the O/N liquidity pressures at rapid phase

Overnight negative liquidity causes pressure on the entire yield curve or term structure of the interest rate. Easing adverse pressure in the short term of the yield curve given a downward inflation scenario would help the interest rate to fall or contain at least the same level.

CBSL is in an aggressive move to ease off the LKR liquidity pressure on the baking sector. It has offered term Rev Repo and last week they start buying bonds from the market.

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