Increased limits on foreign investments
The Monetary Board of the Central Bank at its meeting held on
December 5, has decided to raise the current threshold for foreign
investments in Treasury bills and Treasury bonds from 10 percent of the
outstanding Treasury bill and Treasury bond stock to 12.5 percent.
The robust growth of credit extended by commercial banks as seen so
far during the year is expected to continue, while the Sri Lankan
economy grows at a healthy pace. At the same time, both headline and
core inflation remain subdued.
Nevertheless, the diminished level of excess liquidity in the
domestic money market has caused an upward movement in short-term market
rates in recent weeks.
Meanwhile, foreign investors have expressed continued interest in
investing in the Government Securities market, as a result of growing
uncertainties in advanced economies and greater prospects in emerging
economies,” the Central Bank said yesterday.
This will support the growth momentum of the economy by enhancing
resource availability, while also easing the domestic savings-investment
gap and thereby mitigating any pressure on interest rates.
The Exchange Controller will issue new directions to authorised
dealers, the Central Bank said.
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