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CBSL Explanatory Note on OMOs and money printing

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There have been recent claims in the media that the Central Bank of Sri Lanka (CBSL) has “printed” Rs. 100 billion on 25 October 2024, through its Open Market Operations (OMOs).

It is important to clarify that these claims are not accurate and are baseless. The liquidity (money) injected through OMOs is a routine central banking function aimed at managing adequate liquidity in the banking system for the purpose of stabilizing the short-term interest rates in the economy and ensuring price stability, and hence it should not be grossly misinterpreted as “money printing.”

What is Money Printing?

“Money printing” generally means issuing new money to the economy and in economic terms, new money issued by a central bank is known as ‘reserve money’ or ‘base money’.

Reserve money is also called the ‘monetary base’ of the country (or high-powered money), as the commercial banks can create more money based on the money issued by the central bank. Reserve money is also treated as the monetary liabilities of a central bank and this is reflected in the liability side of the central bank balance sheet, which includes total currency issued by the central bank and the commercial banks’ deposits with the central bank. During 2024, reserve money issued by the CBSL has only increased by about Rs. 147 billion, which is an adequate amount to facilitate transactions in the economy. During 2024, reserve money increase was an outcome of significant purchases of foreign currency by the CBSL, while there has been a reduction in the stock of government securities held by the CBSL.

One of the determining factors of new money issued to the economy by the CBSL in the past was purchasing Treasury bills by the CBSL directly from the primary market. However, with the introduction of the Central Bank of Sri Lanka Act, No. 16 of 2023, which came into effect in September 2023, the CBSL is now prohibited from printing money through the purchase of government securities in the primary market to fund the government.

Purpose of OMOs:

The main objective of the CBSL is to maintain domestic price stability, which means keeping inflation low and stable. Monetary policy, which is the strategy that a central bank manages interest rates and the money supply, is used to maintain price stability. The OMOs are a key instrument of monetary policy of a central bank. Currently, the CBSL relies on market-based policy instruments to implement monetary policy effectively, and hence one of the primary tools used in this process is the OMOs.

Under the OMOs, the CBSL provides liquidity to the commercial banks for the purpose of preventing sudden changes in the interest rates that can destabilize the economy.

Therefore, OMOs are a tool used by the CBSL to maintain stability in short-term interest rates, specifically the interbank call money rates. The CBSL conducts market operations to manage liquidity to ensure stability in the short-term interest rates.

OMOs are carried out through auctions involving the purchase or sale of government securities on either a temporary or permanent basis from the secondary market. Therefore, OMOs are predominantly short-term operations that help in managing liquidity imbalances in the banking system. During 2024, the liquidity injections by the CBSL are mostly overnight (1 day) or for 7 days. These operations were used as temporary liquidity injecting measures aimed at stabilizing the financial system by managing upward pressure on interest rates, and thereby ensuring smooth functioning of the economy and cannot merely be interpreted as money printing.

OMOs are carried out through auctions involving the purchase or sale of government securities on either a temporary or permanent basis from the secondary market. Therefore, OMOs are predominantly short-term operations that help in managing liquidity imbalances in the banking system. During 2024, the liquidity injections by the CBSL are mostly overnight

(1 day) or for 7 days. These operations were used as temporary liquidity injecting measures aimed at stabilizing the financial system by managing upward pressure on interest rates, and thereby ensuring smooth functioning of the economy and cannot merely be interpreted as money printing.

Furthermore, central banks worldwide regularly conduct similar operations to manage liquidity conditions. These are routine and standard actions carried out by central banks in liquidity management under monetary policy implementation.

Current Context:

During 2024, the CBSL has conducted frequent liquidity injections due to persistent liquidity asymmetries, despite the prevailing surplus in the banking system. Although the money market operates with surplus liquidity, this surplus is unevenly distributed among commercial banks, creating liquidity needs for domestic banks, for their day to day operations, including lending to the customers. Certain commercial banks have faced severe liquidity shortfalls due to stricter exposure limits for interbank transactions following the sovereign credit rating downgrade. Money market lending by the foreign banks operating in Sri Lanka has remained limited, despite their significant liquidity surplus, due to the strict exposure limits. Hence, the CBSL’s liquidity injections have addressed these shortfalls, ensuring that short-term interest rates, especially the call money rates remain stable.

Without such interventions by the CBSL, short-term interest rates could have increased sharply, disrupting the broader economy and affecting the CBSL’s ability to meet its inflation target.

Conclusion:

The above-mentioned media reports have misinterpreted the auctions and monetary operations conducted by CBSL as a part of its regular Open Market Operations. There has been no “money printing” or issuance of liquidity to finance the government’s budget by the CBSL. These actions are part of the standard process of monetary operations aimed at achieving the CBSL’s objective of price stability.



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Malaysia courts more Sri Lankan travelers as ‘Visit Malaysia 2026’ gathers steam

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Malaysian H.C. Badli Hisham Adam: ‘Fresh biz opportunities

Malaysia is intensifying efforts to attract more Sri Lankan travelers by promoting its diverse tourism offerings, strong air connectivity, Muslim-friendly facilities and expanding business partnerships ahead of the ‘Visit Malaysia 2026’ (VMY2026) campaign.

Addressing the Tourism Malaysia product presentation yesterday in Colombo, Malaysian High Commissioner to Sri Lanka Badli Hisham Adam said tourism remains one of the strongest pillars of the long-standing bilateral relationship between Malaysia and Sri Lanka, helping strengthen cultural understanding, business links and people-to-people ties.

The event, organised by Tourism Malaysia Chennai in collaboration with the High Commission of Malaysia in Colombo, brought together Malaysian tourism stakeholders, airline representatives, Sri Lankan travel industry professionals and members of the media to explore new business opportunities.

The High Commissioner said Sri Lanka continues to be an important source market for Malaysia, with growing numbers of Sri Lankan travelers seeking destinations that combine diversity, affordability, quality experiences and convenient connectivity.

“As part of ‘Visit Malaysia 2026’, we warmly invite Sri Lankan travelers to discover the richness of Malaysia, he said.

Highlighting Malaysia’s tourism strengths, the envoy said the country offers a wide range of attractions, including multicultural cities, UNESCO World Heritage Sites, pristine beaches, tropical rainforests, cool highlands and unique wildlife.

These are complemented by world-class shopping, family-friendly attractions, educational opportunities, wellness and medical tourism, business events and internationally renowned hospitality.

He also stressed Malaysia’s position as the world’s leading Muslim-friendly destination, supported by an extensive halal ecosystem with internationally recognised certification, halal-certified restaurants, easily accessible prayer facilities and family-oriented amenities across the country.

Despite ongoing geopolitical uncertainties around the world, the High Commissioner said Malaysia remains a stable, peaceful and welcoming destination for international travelers.

He urged Sri Lankan travel agents to strengthen collaboration with Malaysian tourism providers by developing innovative travel packages targeting leisure travelers, business visitors and event participants.

The presentation featured leading Malaysian tourism partners, including Wyndham Ion Majestic, Lotus Desaru, Key Term Holidays representing the Sabah Tourism Board and Asian Overland representing The PULSE Group, showcasing Malaysia’s diverse tourism experiences and investment in the Sri Lankan market.

The envoy also acknowledged the contribution of airline partners and the media in enhancing Malaysia’s visibility and improving travel connectivity between the two countries.

Looking ahead to ‘Visit Malaysia 2026’, he said the future growth of tourism would depend on stronger collaboration, innovation and meaningful partnerships between industry stakeholders.

He expressed confidence that closer cooperation between Malaysia and Sri Lanka would generate fresh business opportunities while encouraging more Sri Lankan visitors to experience Malaysia’s culture, diversity and hospitality.

The High Commissioner concluded by expressing hope that the networking session would lead to stronger commercial partnerships and contribute to the success of ‘Visit Malaysia 2026’, further deepening tourism and economic ties between the two friendly nations.

By Ifham Nizam

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Women Empowered Global launches ‘Leadership Lab’

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Senela Jayasuriya, Founder and CEO of Women Empowered Global.

Women Empowered Global (WEG), a network of award‑winning female leaders, corporate CXOs and entrepreneurs, experts and thought leaders dedicated to empowering women from six continents, unveiled the ‘WEG Leadership Lab’, a 24‑week virtual intensive programme, commencing 26 September. The programme is designed exclusively for women leaders who are ready to accelerate their careers, amplify leadership visibility, and drive transformational growth.

The women‑only leadership experience breaks the mould of conventional training, offering a powerful blend of masterclasses, mentorship, and practical leadership tools tailored for rising leaders, managers, and senior professionals. Participants will gain international exposure, sharpen essential skills, and the opportunity to join a vibrant knowledge‑sharing community which fosters confidence, resilience, and impact.

“The WEG Leadership Lab is not for casual growth. It is for women who are serious about transforming their leadership journey,” said Senela Jayasuriya, Founder/CEO, Women Empowered Global. “By combining global expertise with local delivery, we are creating pathways for women across manufacturing, trading, finance, marketing, technology, and management, as entrepreneurs, business owners, fractional executives, or corporate leaders, to thrive and build a more inclusive leadership landscape.”

WEG’s platform facilitates international exposure and career development for professionals and connects more than 4,000 members worldwide. The Leadership Lab builds on WEG’s flagship initiatives, including the 1 Million Women in Power campaign, the African Women Leadership Forum, the Business Hub, and the Global Online Academy. The programme aims to deliver a transformative journey equipping women to step boldly into leadership roles locally and internationally.

Led by Senela Jayasuriya (MBA, UK), an internationally recognized and awarded leadership & empowerment coach and innovation partner, keynote speaker, and certified expert, WEG collaborates with DEI specialists, corporate boards, Business and HR leaders, to design programmes which advance women’s careers, leadership visibility, equity, and inclusion. To date, she has successfully delivered leadership development programmes to more than 20,000 professionals.

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JKCG Auto and Green EV join forces to build Sri Lanka’s most expansive EV charging network

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John Keells CG Auto (JKCG Auto), the authorised distributor of BYD and Denza in Sri Lanka, has launched a strategic partnership with Green EV on 26th June 2026 to significantly expand the charging infrastructure available to its customers across the island. The collaboration, formalised through a Memorandum of Understanding (MOU), marks a pivotal step in JKCG Auto’s ongoing commitment to building a comprehensive and reliable New Energy Vehicle (NEV) ecosystem in Sri Lanka.

Through this partnership, BYD and Denza owners will gain seamless access to Green EV’s public charging network of 100+ DC fast chargers and 70 AC chargers, spanning 20 districts and all nine provinces of Sri Lanka, from Jaffna in the north to Hambantota in the south, and from Puttalam on the northwest coast to Trincomalee and Ampara on the eastern seaboard, encompassing a mix of 40kW, 60kW, and 120kW fast-charging infrastructure. The network has been designed to ensure that customers can charge conveniently and confidently, whether in the heart of Colombo or in suburban and outstation communities, removing one of the most commonly cited barriers to EV adoption in Sri Lanka. Further strengthening customer confidence, Green EV has partnered with SLIC to provide a comprehensive insurance cover of LKR 100 million for every Green EV charging station, offering protection against potential damages and ensuring complete peace of mind for every user.

The initiative reflects JKCG Auto’s broader strategy to invest in the foundations of sustainable mobility, ensuring that the transition to electric vehicles is supported not only by world-class vehicles, but by a dependable ecosystem that addresses the practical needs of everyday ownership.

“If the future of mobility in Sri Lanka is going to be electric, success will hinge on how accessible we are able to make the actual vehicles, as well as the enabling infrastructure around them. JKCG Auto is proud to partner with other visionaries like Green EV to ensure that we eliminate range anxiety, so that every customer – whether in Colombo or anywhere in Sri Lanka will have the confidence to go electric,” JKCG Auto Chief Executive Officer, Charith Panditharatne.

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