COLOMBO, Sri Lanka – 24 August 2026 – The Central Bank of Sri Lanka (CBSL) today released its Open Market Operations (OMO) report for August 24, 2026, detailing transactions aimed at managing liquidity and short-term interest rates within the domestic money market. The data indicates continued stability in market rates and a significant level of surplus liquidity, with robust participation in the CBSL’s various facilities.
Overnight Money Market Activity Reflects Stability
The overnight money market exhibited stable conditions, with both the Call Money and Repo markets operating within expected ranges. The weighted average rate for the Call Money Market stood at 8.84%, while the Repo Market’s weighted average rate was marginally higher at 8.87%. Transaction volumes were substantial, underscoring active interbank lending:
- Call Money Market: Total Gross Amount transacted was Rs. 49,895 million, with a Net Amount of Rs. 49,895 million. Rates ranged from 8.70% to 8.86%.
- Repo Market: Total Gross Amount reached Rs. 96,440 million, with a Net Amount of Rs. 96,110 million. Rates varied between 8.82% and 8.92%.
These figures suggest a well-functioning market with adequate liquidity to meet short-term funding needs among financial institutions.
CBSL’s Strategic Open Market Auctions
The CBSL conducted both an Overnight Repo Auction and a Long-Term Repo Auction to further fine-tune market liquidity. These operations are crucial tools in the Central Bank’s monetary policy framework.
Overnight Repo Auction
The overnight auction, settling on August 24 and maturing on August 25, saw the CBSL offering Rs. 50,000 million. Market participants bid Rs. 32,800 million, all of which was accepted by the Central Bank. The weighted average yield for this facility was recorded at 8.75%, with accepted rates ranging from 8.74% to 8.75%. This indicates a clear demand for short-term liquidity, met efficiently by the CBSL.
Long-Term Repo Auction
A 30-day Long-Term Repo Auction was also conducted, with settlement on August 25 and maturity on September 24, 2026. The CBSL offered Rs. 30,000 million. Bids received amounted to Rs. 33,000 million, slightly exceeding the offered amount, and the CBSL accepted the full Rs. 30,000 million. The weighted average yield for this longer-term facility was 9.19%, with all accepted bids at this rate. This auction provides insights into market expectations for future liquidity conditions and longer-term interest rate stability.
Standing Facilities Highlight Ample Market Liquidity
A key indicator of market liquidity is the usage of the CBSL’s Standing Facilities. On August 24, 2026, the Standing Deposit Facility (SDF) saw a substantial Rs. 90,675 million being deposited by commercial banks with the CBSL. Conversely, the Standing Lending Facility (SLF) experienced minimal usage, with only Rs. 265 million being borrowed.
The high utilization of the SDF and negligible reliance on the SLF strongly signals an environment of significant surplus liquidity within the banking system. This suggests that banks have ample funds, reducing the need to borrow from the Central Bank at higher rates and contributing to downward pressure on short-term market rates.
CBSL’s Treasury Bill/Bond Holdings
The CBSL continues to hold a substantial portfolio of Treasury Bills and Bonds, with a face value of Rs. 2,492,619.35 million and a book value of Rs. 1,528,481.42 million. These holdings represent a critical component of the Central Bank’s balance sheet and are instrumental in implementing its monetary policy objectives, including managing liquidity and influencing long-term yields in the Sri Lankan economy.
Overall, the Open Market Operations on August 24, 2026, demonstrate the CBSL’s ongoing active role in maintaining financial market stability and ensuring appropriate liquidity conditions. The robust utilization of the Standing Deposit Facility and the smooth execution of repo auctions underscore a market environment characterized by ample liquidity and stable short-term interest rates.
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