Inflation ( CCPI)1.7% (June 2024)
GDP5.3% (1Q 2024)
Unemployment4.3% (4Q 2023)
3M T-Bill Rate9.14%
12M T-Bill Rate9.95%
2Y T-Bond Rate10.10%/ 10.20%
4Y T-Bond Rate11.60% / 11.70%
USD/LKR303/304
Reserves $5.6Bn (June 2024)
Cum. Trade Deficit $2,180 Mn (May 2024 cumulative)
Cum. Fiscal DeficitLKR 361Bn (April 2024)

Real Return on Financial instruments surged as inflation collapse

Interest RatesSep 13, 2023
Real Return on Financial instruments surged as inflation collapse

The steep decline of the year-on-year inflation has sent the real return on fixed-income securities to a historical high. Lower demand and base effect may keep the Sri Lanka inflation at single digits for the rest of the year. The historical real return on fixed-income securities in Sri Lanka is marginally above the mid-single digit.

The fixed income returns to settle at a historical level, it require the nominal interest rate to adjust at least by 3% to 5% downward. The T-Bill rates are highly attractive in the current context with low risk and highest return.

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