Interest Rates in Government Securities Market Decline Further
The yield rates on Treasury bills declined further at the primary auction held on November 11, 2009. The yield rate on Treasury bills with a maturity of 91 days declined by 41 basis points to 7.73 per cent, the lowest since April 2005. This trend was reflected in the yield rates of
Treasury bills with the maturities of 182 days and 364 days, too. With this reduction, primary market yield rates of the Treasury bills have declined by 947 – 950 basis points during the past 12 months period. The secondary market Treasury bill yield rates also continued on its decelerating path during this period.
The reduction in yield rates observed during the recent past is in line with the gradual easing of the monetary policy stance by the Central Bank of Sri Lanka, increased foreign investor participation in the Government securities market, prevailing liquidity position in the market and positive view of the market on the deceleration of inflation rate.
Sri Lanka’s Gross Official Reserves to Exceed US dollars 5 billion with the Approval of the Second Tranche under the IMF – SBA Facility
SThe Executive Board of the International Monetary Fund (IMF) on 06 November 2009 approved the second tranche of SDR 206.7 million (approximately USD 329 million) under its 20-months Stand-by Arrangement (SBA) facility of SDR 1.65 billion (approximately USD 2.6
billion) to Sri Lanka. The Letter of Intent (LOI) and the Technical Memorandum of Understanding (TMU) in this regard is made available in the Central Bank of Sri Lanka web site (www.cbsl.gov.lk).
The gross official international reserves (without ACU balances) of the country, which has already exceeded US dollars 4.8 billion, will surpass US dollars 5 billion mark with the receipt of the USD 329 million. With the renewed investor confidence on the Sri Lanka’s economy and the continuation of the steady increase in foreign exchange inflows, the country’s external reserves position is expected to strengthen further in the coming months.
Sri Lanka expects 6.0-pct growth from 4Q: CB Governor
Nov 12, 2009 (LBO) – Sri Lanka’s economic growth is projected to touch 6.0 percent in the fourth quarter of 2009 allowing the country to return to a higher growth path from 2010, Central Bank Governor Nivard Cabraal said.
“Overall we should have 6.0 percent or slightly less than 6.0 as the growth for the final quarter,” Cabraal said.
“If we have that what it will mean is that we would then be moving into the path of high growth once again.”
Cabraal said internal projections estimated growth for agriculture at 7.0 or slightly over, around 6.0 percent for industry and between 5.0 and 6.0 percent for services.
Central Bank is expecting Sri Lanka’s economy to expand 3.5 percent during the full year following slowdown in the first part of the year.
Sri Lanka’s statistics office estimated the economy to have expanded by 1.5 percent in the first quarter and 2.1 percent in the second quarter.
After dipping sharply Sri Lanka external trade, a good barometer of economic activity, has picked up.
Cabraal said government tax revenues, another direct indicator of economic activity, have also picked up.