Inflation ( CCPI)1.3% (Sep 2023)
GDP-3.1% (2Q 2023)
Unemployment4.7% (1Q 2023)
3M T-Bill Rate17.42%
12M T-Bill Rate13.30%
2Y T-Bond Rate14.60%/ 15.00%
4Y T-Bond Rate14.50% / 14.90%
Reserves $3.60Bn (Aug 2023)
Cum. Trade Deficit $2,930 Mn (Aug 2023 cumulative)
Cum. Fiscal DeficitLKR 1,243 Bn (June 2023)

Overnight net Liquidly turned to almost positive after CBSL's LKR 90Bn Rev Repo Auction

Bank & FinanceJan 11, 2023
Overnight net Liquidly turned to almost positive after CBSL's LKR 90Bn Rev Repo Auction

The banks and PDs borrow and lend to each other in the money market and any excess liquidity will deposit with CBSL at 14.50% or any shortfall will finance from CBSL at 15.50% on an overnight basis. CBSL has started lending term money to the market instead of overnight money at 28% to 29%.

As the interest rate has increased substantially, the market participants required more collaterals to borrow from CBSL. Borrowing & settling overnight basis creates operational hassle and increases settlement risk. CBSL has eased the operational and settlement risk by lending on a term basis ( 30 days to 60 days).


Charts represents an assessment of the market environment as of the date indicated and it is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

The information presented does not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy or investment decision. This document contains general information only and does not take into account an individual’s financial circumstances. An assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decisions.