But interest rates charged by commercial banks show marginal increase

By Sanath Nanayakkare

The total outstanding market liquidity was a surplus of Rs. 123.370 bn by 08th November 2024, compared to a surplus of Rs. 80.050 bn by the end of last week, states the weekly economic Indicators report of the Central Bank of Sri Lanka.

“The reserve money increased compared to the previous week mainly due to increase in the currency in circulation and deposits held by the commercial banks with the Central Bank,” it states.

“Meanwhile, weekly Average Weighted Prime Lending Rate (AWPR) for the week ending 08th November 2024 increased by 11 bps to 9.16 per cent compared to the previous week,” it indicates.

The following are some facts and figures mentioned in the report.

During the period from 02nd November to 08th November 2024, crude oil prices followed a general upward trend mainly owing to the OPEC+ decision to extend the output cuts to another month in December and concerns over supply risks stemming from Trump’s presidency.

Overall, Brent and WTI prices rose by US dollars 1.35 and US dollars 1.56 per barrel, respectively, over the period.

Broad money (M2b) expanded by 8.9 per cent, on a year-on-year basis, in September 2024. Net Credit to the Government from the banking system decreased by Rs. 42.5 bn in September 2024. Outstanding credit to public corporations increased by Rs. 5.8 bn in September 2024. Outstanding credit extended to the private sector increased by Rs. 88.9 bn in September 2024 recording a year-on-year growth of 8.9 per cent

During the week, yield rates for both T-Bills and T-Bonds remained broadly stable. The rupee value of T-Bills and T-Bonds held by foreign investors increased by 4 per cent during the reporting week

In the reporting week, the auction for T-Bills experienced oversubscription rate of approximately 1.7 times. An increase of 16.7 per cent was observed in the total volume of secondary market transactions in T-Bills and T-Bonds in the reporting week compared to the week before.

During the year up to 08th November 2024, the Sri Lanka rupee appreciated against the US dollar by 10.7 per cent. Workers’ remittances amounted to US dollars 587.7 mn in October 2024, compared to US dollars 555.6 mn in September 2024 and US dollars 517.4 mn in October 2023. Earnings from tourism amounted to US dollars 185.6 mn in October 2024, compared to US dollars 181.0 mn in September 2024 and US dollars 136.7 mn in October 2023.

The net purchases by CBSL from the domestic foreign exchange market amounted to US dollars 189.5 mn in October 2024.

The gross official reserves were provisionally estimated at US dollars 6,467 mn as at end October 2024. This includes proceeds from the People’s Bank of China (PBOC) swap arrangement, which is subject to conditionalities on usability.