Colombo, Sri Lanka – October 1, 2026 – The Central Bank of Sri Lanka (CBSL) today released its daily report on Open Market Operations (OMO), detailing crucial interventions to manage liquidity within the financial system as of October 1, 2026. These operations are vital for maintaining price stability and supporting economic growth, reflecting the current state of the overnight money market and the CBSL’s strategic efforts.
Overview of Market Dynamics
The latest figures from the Market Operations Department highlight active participation across various segments, with significant volumes transacted in both the Call Money and Repo Markets. The CBSL successfully absorbed excess liquidity through its overnight repo auction and long-term repo auction, while also utilizing the Standing Deposit Facility.
Overnight Money Market Transactions
The overnight money market saw substantial activity, providing a snapshot of interbank liquidity. The Call Money Market recorded a weighted average rate of 8.98%, with rates fluctuating between a minimum of 8.95% and a maximum of 9.00%. The total gross amount transacted stood at Rs. 54,025 million, with a net amount of Rs. 52,525 million.
In the Repo Market, the weighted average rate was slightly higher at 9.03%, ranging from 9.00% to 9.10%. This segment saw a significant total gross amount of Rs. 104,440 million and a net amount of Rs. 104,140 million, indicating robust demand for short-term secured funding.
Central Bank’s Open Market Operations
The CBSL conducted several key auctions to manage market liquidity:
-
Overnight Repo Auction:
The CBSL offered Rs. 70,000 million in an overnight repo auction, attracting bids totaling Rs. 73,000 million. The entire offered amount of Rs. 70,000 million was accepted at a weighted average yield of 8.73%. The accepted rates ranged from 8.72% to 8.73%, settling and maturing on October 1st and October 2nd, respectively.
-
Short Term Repo Auction:
An offering of Rs. 30,000 million for a 7-day maturity (maturing on October 8th) saw no bids received and consequently, no amount accepted. This suggests a lack of market interest for this particular tenor at the prevailing conditions or an abundance of short-term liquidity, reducing the need for such an instrument.
-
Long Term Repo Auction:
The CBSL also offered Rs. 30,000 million for a 31-day maturity (maturing on November 2nd). This auction received bids amounting to Rs. 31,000 million. The CBSL accepted the full offered amount of Rs. 30,000 million at a weighted average yield of 9.12%, with all accepted rates at 9.12%. This signals the Central Bank’s readiness to manage medium-term liquidity.
Use of CBSL Standing Facilities
Further illustrating market liquidity conditions, financial institutions utilized the CBSL’s Standing Deposit Facility (SDF) to deposit a significant amount of Rs. 80,128 million. Notably, there was no utilization of the Standing Lending Facility (SLF), indicating that banks generally had sufficient liquidity and did not require overnight borrowing from the CBSL on this date.
CBSL Treasury Bill/Bond Holdings
As of October 1, 2026, the Central Bank’s holdings of Treasury Bills and Bonds stood at a face value of Rs. 2,492,619.35 million, with a book value of Rs. 1,526,494.67 million. These holdings are integral to the CBSL’s balance sheet and its overall monetary policy framework.
Today’s Open Market Operations underscore the Central Bank of Sri Lanka’s continuous commitment to maintaining stability in the financial markets and effectively managing systemic liquidity. These actions are crucial in steering the economy towards sustainable growth and mitigating potential inflationary pressures.
Source: Read original document
