Colombo, 18 September 2026 – The Central Bank of Sri Lanka (CBSL), through its Market Operations Department, conducted a series of open market operations (OMOs) today, 18 September 2026, to manage liquidity within the domestic money market. These routine but crucial interventions are instrumental in guiding short-term interest rates and maintaining stability in the financial system.
Overnight Money Market Dynamics
Today’s overnight money market saw significant activity, reflecting the banking sector’s short-term funding needs and surpluses. The Call Money Market recorded a weighted average rate of 8.91%, with rates fluctuating between a minimum of 8.86% and a maximum of 8.96%. The total gross amount transacted in the Call Money Market stood at Rs. 46,430 million, with a net amount of Rs. 42,400 million.
Similarly, the Overnight Repo Market registered a weighted average rate of 8.96%, ranging from 8.92% to 9.02%. Gross transactions in the Repo Market amounted to Rs. 75,941 million, with net transactions at Rs. 75,900 million. These figures provide a snapshot of the immediate liquidity conditions and interbank borrowing costs in the Sri Lankan financial landscape.
CBSL’s Open Market Operations: Repo Auctions
To further influence market liquidity and rates, the CBSL engaged in targeted repo auctions:
- Overnight Repo Auction: The CBSL offered Rs. 60,000 million in an overnight repo auction, settling today and maturing on 21 September 2026. Bids received totalled Rs. 30,500 million, all of which were accepted by the Central Bank. The weighted average yield for this auction settled at 8.75%, with accepted rates falling within a narrow band of 8.73% to 8.75%. This operation indicates the CBSL’s intention to absorb surplus liquidity for a short duration.
- Short Term Repo Auction (7-day): A Short Term Repo Auction, with a maturity period of 7 days (maturing on 25 September 2026), was also offered for an amount of Rs. 30,000 million. Notably, no bids were received or accepted in this particular auction. This outcome suggests that market participants either had sufficient liquidity at that tenor or preferred shorter-term options available through the overnight market and standing facilities.
Standing Facilities and CBSL Holdings
The banking sector also utilized the CBSL’s standing facilities, which act as a safety net for overnight liquidity management:
- The Standing Deposit Facility (SDF), where banks deposit surplus funds with the CBSL, saw an uptake of Rs. 94,405 million.
- Conversely, the Standing Lending Facility (SLF), used by banks to borrow funds from the CBSL, was utilized for a comparatively small amount of Rs. 120 million.
These figures indicate that overall system liquidity remains healthy, with banks primarily placing excess funds rather than seeking urgent borrowings from the Central Bank.
Furthermore, the CBSL’s strategic holdings of Treasury Bills and Bonds remain substantial. As of today, the face value of these holdings amounted to Rs. 2,492,619.35 million, with a book value of Rs. 1,519,045.62 million. These holdings are a key component of the CBSL’s balance sheet and its capacity to conduct monetary policy operations.
Today’s OMOs underscore the Central Bank’s continuous efforts to manage systemic liquidity, influence short-term interest rates, and ensure the smooth functioning of Sri Lanka’s financial markets.
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