Header Ad

Sri Lanka’s Treasuries yields plunge after SRR halved

ECONOMYNEXT- Sri Lanka’s Treasury bill yields plunged across maturities after the statutory reserve ratio was halved to 2 percent from 4 which came overnight shortly after President Gotabaya Rajapaksa slammed the central bank not issuing new money to banks to give loans.

The 12 month bill yield plunged 30 basis points to 6.62 percent, with the central bank selling 15 billion rupees in bills after offering 12 billion.

The 6-month bill yield fell to 6.30 percent from 6.78 percent, with 3.0 billion rupees in bills offered and sold.

The 3-month yield fell 37 basis points to 6.30 percent, with 8.0 billion offered and 3.0 billion sold.

Sri Lanka’s central bank slashed the reserve ratio releasing 115 billion rupees to the banking system overnight and also said re-finance loans would be raised from 50 billion rupees to 150 billion rupees as requested by President.

The central bank first proposed the re-financed loan without any apparent political pressure.

The SRR cut released 115 billion rupees to the banking system after President Gotabaya Rajapaksa slammed the central bank for not expanding re-financed credit. (Colombo/June17/2020-sb)