COLOMBO, Sri Lanka – 24 September 2026 – The Central Bank of Sri Lanka (CBSL) today released its comprehensive report on Open Market Operations (OMO) conducted on 24 September 2026, offering crucial insights into the nation’s money market liquidity and the prevailing interest rate environment. These daily operations are a cornerstone of the CBSL’s monetary policy framework, aimed at managing liquidity and influencing short-term interest rates to ensure financial stability and support the Sri Lankan economy.
Overnight Money Market Dynamics
The overnight money market saw significant activity across both the Call Money Market and the Repo Market. These transactions provide a real-time gauge of interbank liquidity and the immediate cost of borrowing:
- Call Money Market: The weighted average rate settled at 8.93%, with individual rates ranging from a minimum of 8.85% to a maximum of 9.00%. Total gross transactions reached Rs. 45,990 million, with a net amount of Rs. 45,490 million.
- Repo Market: A slightly higher weighted average rate of 8.99% was observed, within a range of 8.95% to 9.03%. The Repo Market facilitated substantial gross transactions totalling Rs. 69,315 million, with a net amount of Rs. 69,050 million.
The combined gross volume across both overnight segments highlights the continuous demand and supply dynamics within the financial system on this day.
CBSL’s Strategic Repo Auction Interventions
In its active role of managing systemic liquidity, the CBSL conducted three distinct repo auctions, signaling its stance on short-term interest rates and market liquidity:
i. Overnight Repo Auction
The CBSL offered Rs. 40,000 million in an Overnight Repo Auction, which was settled on 24 September 2026 and matures the following day. The market showed demand by submitting bids totalling Rs. 33,000 million, all of which were accepted by the Central Bank. This auction cleared at a weighted average yield of 8.74%, with accepted rates ranging from 8.72% to 8.75%.
ii. Short Term Repo Auction (7 Days)
A Short Term Repo Auction for a 7-day maturity (settling 24 September and maturing on 1 October 2026) saw the CBSL offer Rs. 30,000 million. Bids received amounted to Rs. 10,000 million, all of which were accepted. This auction was notably uniform in its pricing, clearing at a consistent weighted average yield of 8.75%, which was both the minimum and maximum accepted rate.
iii. Long Term Repo Auction (28 Days)
The Long Term Repo Auction, offering Rs. 40,000 million for a 28-day maturity (settling 25 September and maturing on 23 October 2026), demonstrated strong market appetite. The CBSL received bids totalling Rs. 71,000 million, significantly oversubscribing the offered amount. The Central Bank accepted the full offered amount of Rs. 40,000 million. This auction also exhibited a uniform clearing, settling at a weighted average yield of 9.15%, which matched the minimum and maximum accepted rates.
Standing Facilities and Treasury Holdings
Further reflecting the prevailing liquidity conditions, the banking system utilized the CBSL’s Standing Deposit Facility (SDF) to place Rs. 68,061 million. Notably, there was no reported utilization of the Standing Lending Facility (SLF) on this particular day, indicating an overall surplus liquidity position within the financial system which required absorption by the CBSL.
The report also provided an update on the CBSL’s substantial holdings of government securities. The face value of CBSL’s Treasury Bill and Bond holdings stood at Rs. 2,492,619.35 million, with a book value of Rs. 1,530,958.88 million. These holdings are a key instrument in the CBSL’s open market operations and a significant component of its balance sheet, underpinning its ability to influence market liquidity and interest rates.
Implications for the Sri Lankan Financial Landscape
The Open Market Operations conducted on 24 September 2026 underscore the Central Bank’s continuous efforts to manage systemic liquidity and guide short-term interest rates in line with its monetary policy objectives. The mix of oversubscription in the longer-term repo and the use of the Standing Deposit Facility suggests varying liquidity needs and preferences among market participants, while confirming an overall need for liquidity absorption by the CBSL.
These daily operations are vital for fostering stability in the financial system and ensuring that the monetary policy framework effectively contributes to macroeconomic stability and sustainable economic growth in Sri Lanka.
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