CBSL clarifies T-Bill Auction process

The Central Bank of Sri Lanka says that Treasury Bill auctions are conducted according to a transparent and well-established procedure.

In response to recent media reports, the Central Bank of Sri Lanka said that the procedure with regard to Treasury Bill auctions is independent of the monetary policy decision-making process.

It said that any postponement of raising funds for the government, in anticipation of any change in policy interest rates, is not feasible given the large cashflow requirement of the government and its commitment to phasing out monetary financing by the Central Bank.

The statement noted that the banking system is also not in a position, at present, to provide significant additional advances to the government due to liquidity constraints and risk management considerations arising from current exposure levels.