COLOMBO, Sri Lanka – 17 September 2026 – The Central Bank of Sri Lanka (CBSL) today released its detailed report on Open Market Operations (OMO) conducted on September 17, 2026, offering a glimpse into the country’s current liquidity landscape and the CBSL’s active role in managing it. The data, issued by the Market Operations Department, reveals mixed demand across various liquidity injection instruments, alongside significant activity in the overnight money market.
The latest figures underscore the CBSL’s continuous efforts to maintain appropriate liquidity levels within the banking system, a crucial aspect for ensuring financial stability and supporting economic activity.
Overnight Money Market Sees Robust Activity
The overnight money market experienced substantial transactions, reflecting the daily funding requirements of financial institutions. The key highlights are:
- Call Money Market: Recorded a weighted average rate of 8.90%, with total net transactions amounting to Rs. 41,660 million.
- Repo Market: Showed a weighted average rate of 8.96%, with total net transactions reaching Rs. 86,394 million.
These rates and volumes indicate active interbank lending and borrowing, with the repo market dominating in terms of liquidity exchange.
Open Market Operations: A Closer Look
The CBSL’s direct OMOs on September 17 focused on injecting liquidity through various repo auctions:
Overnight Repo Auction Fully Accepted
An Overnight Repo Auction was conducted to address immediate liquidity needs. The CBSL offered Rs. 50,000 million for settlement and maturity on September 17 and 18, respectively. Bids received totalled Rs. 49,500 million, all of which were accepted at a weighted average yield of 8.71%. This indicates that while slightly undersubscribed, all available bids were taken up, suggesting a continued demand for short-term liquidity.
Short Term Repo Auction Sees No Bids
Interestingly, the Short Term Repo Auction, offering Rs. 20,000 million for a 7-day maturity (settling September 17, maturing September 24), received no bids. This lack of demand could signal that financial institutions currently have sufficient short-term liquidity or are opting for alternative funding avenues for this tenor.
Long Term Repo Auction Oversubscribed
In contrast to the short-term auction, the Long Term Repo Auction for 28 days (settling September 18, maturing October 16) saw strong interest. The CBSL offered Rs. 20,000 million, against which bids worth Rs. 21,000 million were received, making it oversubscribed. The CBSL accepted the full offered amount of Rs. 20,000 million at a weighted average yield of 9.19%. This indicates a clear demand for longer-term liquidity, potentially reflecting banks’ desire to secure funding for extended periods amidst current market conditions.
CBSL Standing Facilities and Treasury Holdings
Further insights into the banking system’s liquidity position can be gleaned from the utilisation of the CBSL’s Standing Facilities:
- Standing Deposit Facility (SDF): Banks deposited Rs. 58,886 million with the CBSL, indicating a significant amount of excess liquidity within the system that banks opted to park with the central bank.
- Standing Lending Facility (SLF): Only a modest Rs. 550 million was drawn from the SLF, suggesting that most institutions were able to manage their shortfalls through OMOs or the interbank market, or had sufficient liquidity to avoid higher-cost SLF borrowing.
The CBSL’s balance sheet also reflects its significant holdings in government securities, with Treasury Bills/Bonds holdings reported at a face value of Rs. 2,492,619.35 million and a book value of Rs. 1,526,034.25 million. These holdings represent the central bank’s substantial footprint in the domestic debt market.
The September 17 OMO report from the CBSL provides critical data for market participants and analysts, highlighting the dynamics of liquidity management in Sri Lanka and the central bank’s strategic interventions to maintain economic stability.
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