COLOMBO, Sri Lanka – 29 September 2026 – The Central Bank of Sri Lanka (CBSL) today released details of its Open Market Operations (OMOs) conducted on September 29, 2026, providing a snapshot of the country’s money market dynamics and liquidity conditions. The operations saw the CBSL injecting liquidity through an overnight repo auction, while longer-term repo offerings went unsubscribed, signaling a prevailing surplus within the banking system.
Open Market Operations are crucial tools used by the CBSL to manage liquidity in the financial system, thereby influencing short-term interest rates and supporting the broader economic policy objectives. The latest report from the Market Operations Department offers key insights into the market’s current state.
Overnight Money Market Transactions Reflect Stability
The overnight money market on September 29, 2026, showed stable activity. The Weighted Average Rate (WAR) for the Call Money Market stood at 8.96%, with transactions ranging from a minimum of 8.92% to a maximum of 9.01%. The total gross and net amounts transacted in this segment were both Rs. 25,540 million.
In the Repo Market, the Weighted Average Rate was slightly higher at 9.03%, with rates fluctuating between 8.98% and 9.06%. The total gross amount in the repo market reached Rs. 85,060 million, with a net amount of Rs. 83,860 million.
Repo Auctions: Overnight Demand, Longer Terms Unsubscribed
The CBSL conducted three distinct repo auctions:
Overnight Repo Auction
The overnight repo auction, maturing on September 30, 2026, saw significant interest from market participants. The CBSL offered Rs. 50,000 million, and received bids totaling Rs. 38,000 million. All received bids were accepted, indicating the Central Bank’s willingness to accommodate the short-term liquidity needs. The Weighted Average Yield for this auction was 8.74%, with accepted rates ranging from 8.74% to 8.75%.
Short Term Repo Auction (7 Days)
For the short-term repo auction, maturing on October 6, 2026, the CBSL offered Rs. 40,000 million. However, the auction received no bids, and consequently, no amount was accepted. This suggests that financial institutions had sufficient liquidity for their immediate needs, or preferred other avenues for funding.
Long Term Repo Auction (30 Days)
Similarly, the long-term repo auction, set to mature on October 30, 2026, also saw no participation. Despite an offering of Rs. 20,000 million, no bids were received or accepted, reinforcing the perception of comfortable liquidity levels within the banking sector over a longer horizon.
CBSL Standing Facilities Utilized for Deposits
Further evidence of surplus liquidity in the financial system comes from the utilization of the CBSL’s Standing Facilities. On September 29, 2026, financial institutions deposited a substantial Rs. 113,346 million under the Standing Deposit Facility (SDF). Conversely, there was no utilization of the Standing Lending Facility (SLF), indicating that banks were in a position of excess funds rather than needing to borrow from the central bank.
CBSL Treasury Bill/Bond Holdings
The report also detailed the CBSL’s holdings of Treasury Bills and Bonds. As of September 29, 2026, the Face Value of these holdings stood at Rs. 2,492,619.35 million, with a Book Value of Rs. 1,530,237.38 million. These holdings represent a significant component of the CBSL’s balance sheet and its overall influence on market liquidity.
The CBSL’s Open Market Operations for September 29, 2026, highlight a market characterized by ample liquidity, particularly for short-term horizons. While the overnight repo saw moderate demand, the lack of interest in longer-term facilities and the significant use of the Standing Deposit Facility underscore the current liquidity conditions within Sri Lanka’s financial system.
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