Sri Lanka central bank concerned over primary dealer activity

ECONOMYNEXT – The governing board of Sri Lanka’s central bank said it was "concerned" over profits of a primary dealer and a "pattern of trading" in bond markets.

The statement came after reports of sharp increases in reported profits of Perpetual Treasuries, in the wake of allegations over irregularities in bond auctions and sales of securiteis to the state-managed pension fund.

The full statement is reproduced below:
Statement issued by the Monetary Board

The Monetary Board, at its special meeting held on Friday, 14th October 2016, considered an interim report on the operations of primary dealers, including their financial performance during the year ended 31st March, 2016 as well as the five month period ended 31st August 2016.

It noted with concern the sharp disparity in the performance of primary dealers, as well as certain issues related to the pattern of trading activities.

In this connection, the Monetary Board instructed expeditious completion of the ongoing process of preparation of the relevant On-Site Examination Reports. This would enable the Monetary Board to make an early determination on the future course of action.

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