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T-Bill dealers make a killing while bank depositors earn a pittance

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by Sanath Nanyakkare

Primary dealers, including banks and other financial institutions that lend to the government through lending instruments, such as short-term Treasury Bills, stand to make a surplus profit of about 5.70% which is one of the highest in the history of Sri Lanka, The Island learns.

Surplus profit is made when these primary dealers profit from the prevailing interest pricing errors in the bank deposit rates and in the government securities market.

They invest in more liquid Treasury Bills which bring them an interest rate of 12.92% in just three months whereas an ordinary bank depositor earns an interest between 10-12% per annum.

This indicates a distortion in the money saving market especially against an inflation rate of 18%, analysts say.

Moreover, for the first time after more than five years, CBSL rejected all bids received at T-bond auction held on 29th March 2022 because higher interest rates were expected by market participants to compensate for galloping inflation and higher financing requirement of the government which normal depositors can never do.

Thus undersubscribed bill and bond auctions have increased Central Bank holdings of government securities to Rs. 1.7 trillion, data from the Public Debt Department reveals.

Sri Lanka recorded one of its highest inflation of 18.7% in March 2022 relative to 15.1% in February 2022 causing an alarm among the consumers in the country. Going forward, inflation is expected to remain high due to higher commodity prices and energy costs.

“Although lending rates have adjusted upwards, the adjustment in bank deposit interest rates remains sluggish, which has been inadequate to attract deposits into the banking system,” they said.

“The new Finance Minister will have to further hike interest rates at the next Monetary Policy Meeting to encourage banks and financial institutions to make the required adjustments to deposit rates in order to promote savings and to be fair by ordinary depositors,” they said.



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Ambassador of Switzerland to Sri Lanka pays courtesy call on PM

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The Ambassador of Switzerland to Sri Lanka Dr. Siri Walt paid a courtesy call on Prime Minister Dr. Harini Amarasuriya on the 17th of February at the Temple Trees.

Welcoming the Ambassador of Switzerland to Sri Lanka the Prime Minister briefed the Ambassador on her recent visit to Davos to participate in the World Economic Forum Annual Meeting noting that the series of high-level bilateral meetings held on the sidelines of the Forum, along with two important industry visits provided valuable insights for Sri Lanka’s economic engagement.

The discussion focused on Switzerland’s vocational education and training (VET) system, with particular interest in exploring possible cooperation and knowledge-sharing opportunities.

The Prime Minister also conveyed her appreciation for the assistance extended by the Government of Switzerland following Cyclone Ditwah. She emphasized Sri Lanka’s need for enhanced technical assistance during the ongoing rebuilding phase, especially in relation to the reconstruction of bridges and railway infrastructure.

Both sides reaffirmed their shared commitment to further strengthening bilateral relations between Sri Lanka and Switzerland, and to expanding cooperation in areas of mutual interest.

First Secretary (Political) of the Embassy of Switzerland in Colombo Ms. Justine Boillat, First Secretary (Migration) of the Embassy of Switzerland in Colombo Ms. Andrea Kienast and the Secretary to the Prime Minister, Pradeep Saputhanthri, Additional Secretary to the Prime Minister, Ms. Sagarika Bogahawatt and officials from the Ministry of Foreign Affairs , Foreign Employment, Tourism.attended the meeting.

[Prime Minister’s Media Division]

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Advisory for low pressure area in the Southwest Bay of Bengal to the south-east of Sri Lanka

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Location of the low-pressure area in the Bay of Bengal Sea area

Advisory for low pressure area in the Southwest Bay of Bengal to the south-east of Sri Lanka.
Issued by the Natural Hazards Early Warning Centre of the Department of Meteorology at 03.00 pm on 18 February 2026

Multiday boats fishermen and naval community are warned that the low-pressure area still persists over the Southwest Bay of Bengal to the south-east of Sri Lanka. Under the influence of this system, heavy showers or thundershowers, Strong winds about (50-60) kmph, and rough or very rough seas can be expected in these sea areas.

The Meteorological Department is constantly monitoring the behavior of the system.

The naval and fishing communities are requested to be attentive to the future forecasts and bulletins issued by the Department of Meteorology in this regard.

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Canada concerned about delay in holding PC polls

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Canadian High Commissioner Isabelle Martin shaking hands with Minister Abayaratne

Canada, said to be the home to the largest Tamil Diaspora community, has expressed concern over the delay in holding Provincial Council (PC) elections. Canadian High Commissioner Isabelle Martin, on Monday (16), took up the issue with Public Administration, Provincial Councils and Local Government Minister Professor Chandana Abayaratne.

Sources quoted Prof. Abayaratne as having told the Canadian HC that the delay was not deliberate on the part of the government. The Minister blamed, what the sources called, certain legal, technical and delimitation issues for the delay.

India compelled Sri Lanka to enact the 13th Amendment to the country’s Constitution to enable the setting up of the Provincial Council system, in line with the Indo-Lanka Peace Accord, which Sri Lanka signed under duress in July 1987.

Prof. Abayaratne has assured the Canadian HC that President Anura Kumara Dissanayake, too, recognised the importance of strengthening the Provincial Council system as a solution to ethnic issues and that urgent steps would be taken in that regard.

During the discussion, matters relating to strengthening political, economic and social relations between the two countries were discussed.

In May 2020, Canada declared that Sri Lanka had perpetrated genocide during the war against the LTTE. Canada also sanctioned former Presidents Mahinda Rajapaksa and Gotabaya Rajapaksa in January 2023 over alleged war crimes.

The Canadian HC also explained her country’s ‘Indo-Pacific’ strategy and how Sri Lanka could benefit from it.

In particular, Canada’s “Pathways to Peace” project will support reconciliation between nations, and to improve communication by encouraging the learning of mutual languages as a second language, and it was also agreed to provide more opportunities for Sri Lankan students to pursue higher studies in Canada.

The Canadian delegation also expressed its willingness to provide the necessary technical assistance to solve the drinking water problems in Puttalam, Mannar and the North-Eastern provinces under technical cooperation, and to implement the relevant projects after a preliminary study.

by Shamindra Ferdinando

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