Colombo, Sri Lanka – 16 September 2026 – The Central Bank of Sri Lanka (CBSL) today released its crucial Open Market Operations (OMO) report for 16 September 2026, offering vital insights into the nation’s money market liquidity and the central bank’s ongoing efforts to manage short-term interest rates. These operations are a cornerstone of monetary policy, influencing the availability of funds within the financial system and reflecting the overall health of the banking sector.
Overnight Money Market Dynamics
The report from the Market Operations Department highlighted active participation in the overnight money market, providing a clear picture of interbank lending rates and volumes. The Call Money Market recorded a weighted average rate of 8.89%, with rates fluctuating between a minimum of 8.80% and a maximum of 8.93%. The total gross and net amounts transacted in this segment stood at Rs. 44,940 million.
Similarly, the Repo Market saw robust activity, registering a weighted average rate of 8.95%. The rates in the Repo Market ranged from a minimum of 8.90% to a maximum of 9.00%. The total gross and net amounts for Repo transactions reached a significant Rs. 83,150 million.
CBSL Open Market Auctions
To further manage liquidity, the CBSL conducted two key auctions:
i. Overnight Repo Auction
The overnight repo auction, designed for immediate liquidity adjustment, saw the following statistics:
- Amount Offered: Rs. 60,000 million
- Auction Date: 16 September 2026
- Date of Settlement: 16 September 2026
- Date of Maturity: 17 September 2026
- Bids Received: Rs. 59,350 million
- Amount Accepted: Rs. 59,350 million
- Weighted Average Yield: 8.71%
- Minimum Accepted Rate: 8.68%
- Maximum Accepted Rate: 8.75%
Notably, the CBSL accepted all bids received, which amounted to Rs. 59,350 million against an offered Rs. 60,000 million, indicating a slight undersubscription in the overnight segment.
ii. Short Term Repo Auction
A short-term repo auction with a 7-day maturity was also conducted:
- Amount Offered: Rs. 50,000 million
- Auction Date: 16 September 2026
- Date of Settlement: 16 September 2026
- Date of Maturity: 23 September 2026
- Days to Maturity: 07
- Bids Received: Rs. 35,000 million
- Amount Accepted: Rs. 35,000 million
- Weighted Average Yield: 8.75%
- Minimum Accepted Rate: 8.75%
- Maximum Accepted Rate: 8.75%
This 7-day repo auction was significantly undersubscribed, with the CBSL accepting all Rs. 35,000 million in bids against an offered Rs. 50,000 million. The weighted average yield, minimum, and maximum accepted rates all converged at 8.75%.
Standing Facility Utilisation
Further illustrating the market’s liquidity position, financial institutions placed a substantial Rs. 52,088 million with the CBSL’s Standing Deposit Facility (SDF). In contrast, there was no utilisation of the Standing Lending Facility (SLF) on this date. The significant use of the SDF suggests that there is ample liquidity within the financial system for interbank lending, thus reducing the need for emergency central bank funding through the SLF.
CBSL Treasury Holdings
The Central Bank’s holdings of Treasury Bills and Bonds are a critical component of its balance sheet and OMO framework. On 16 September 2026, these holdings stood at a face value of Rs. 2,492,619.35 million and a book value of Rs. 1,533,862.78 million. These holdings represent a significant portion of the government’s domestic debt and are managed by the CBSL as part of its broader open market operations strategy to influence money supply and interest rates.
The detailed figures released today by the Market Operations Department of the CBSL provide a transparent snapshot of liquidity conditions and the effectiveness of the central bank’s interventions. The undersubscription observed in both repo auctions and the substantial deployment of funds into the SDF collectively point towards prevailing excess liquidity in the money market, which the CBSL is actively managing to maintain stability and guide short-term interest rates in line with its monetary policy objectives.
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