News
T-Bill dealers make a killing while bank depositors earn a pittance
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.
INS Sindhukesari, a submarine serving in the Indian Navy, arrived at the port of Colombo on 03 May 26 to undertake Operational Turnarounds.
The visiting submarine was welcomed by the Sri Lanka Navy in precision with naval traditions.
Throughout its stay in the island, the submarine’s crew is scheduled to participate in a variety of programmes organized by the Sri Lanka Navy, including visits to several tourist attractions in Sri Lanka.
Mikhail Murashko, Minister of Health of the Russian Federation, officially visited the Russian House in Colombo to attend the Sri Lanka–Russia Medical Forum, where members of the Sri Lanka Russia Business Council and graduates from the Association of Sri Lankan Graduates from Socialist countries (ASLGSC) attended.
This historic gathering was graced by rectors and representatives from several world-class Russian medical institutions, including Kursk State Medical University, Sechenov First Moscow State Medical University, and Tver State Medical University, among others.
The forum commenced with an address by Minister Murashko, during which Russian medical graduates in attendance raised pertinent questions regarding medical and pharmaceutical sector opportunities in Sri Lanka.
Levan Dzhagaryan, Ambassador of the Russian Federation to Sri Lanka and the Maldives, together with Madam Maria L. Popova, Counsellor of the Embassy of the Russian Federation in Sri Lanka & the Maldives and Director of the Russian House in Colombo, graced the occasion. Both officials expressed strong support for continued collaboration and future initiatives between the two nations.
The official appointment letters for the members of the newly established “Cricket Transformation Committee” (CTC) were handed over on Monday (04) by the Minister of Youth Affairs and Sports, Sunil Kumara Gamage.
The following members received their letters of appointment at the Ministry premises:
Sidath Wettimuny
Thushira Radella
Prakash Schaffter
Ms. Avanthi Colombage
The Ministry also noted that veteran cricketers Roshan Mahanama and Kumar Sangakkara, who are key members of the committee, are currently overseas. Their official appointments will be formalised immediately upon their arrival in Sri Lanka.
The Cricket Transformation Committee has been mandated to oversee the administration and drive structural reforms within Sri Lanka Cricket (SLC) in accordance with the powers vested in the Minister under the Sports Act No. 25 of 1973.
INS Sindhukesari arrives in Colombo
Minister of Health of the Russian Federation attends the Sri Lanka–Russia Medical Forum
Members of Sri Lanka Cricket Transformation Committee Officially Appointed
Three prison guards arrested following the death of an inmate
Showers or thundershowers will occur at most places of the island after 1.00 pm.
CJ urged to inquire into AKD’s remarks on May 25 court verdict
‘Dates have the highest sugar content to fight Coronavirus’
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