Foreign investors buy Sri Lanka rupee bonds

ECONOMYNEXT – Foreign investors were net buyers of Sri Lanka rupee bonds in the week to October 23, purchasing about 2 billion rupees of securities, central bank data showed.

Foreign investor holdings in Treasury bills and bonds grew to 110.8 billion rupees by October 23, from 108.9 billion rupees a week earlier.

Foreign investor holdings in rupee Treasuries dropped from 109.63 billion rupees a week earlier.
Foreign investors have been selling bonds on a net basis this year.

In July, the central bank reversed its previous policy of keeping interbank rates above market by withdrawing money, cut rates and started to actively print money from August to inject excess liquidity, triggering a period of monetary instability, despite weak private credit, data show.

Whenever the call money rate is targeted with excess liquidity, the rupee is de-stabilized and the central bank can no longer build a ‘reserve buffer’, analysts have pointed out. (Colombo/Oct27/2019)

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