Foreigners continue to buy into Rupee treasuries; Value hits fresh high

THE recovery story in the foreign holdings of Rupee Treasuries continued last week, supported by robust demand.

- By WEALTH TRUST SECURITIES

A sizeable net inflow of Rs. 2.78 billion — equivalent to a 2.0% week-on-week increase — was recorded during the week ending 12 September. This marked the third consecutive week of foreign inflows. As a result, foreign holdings rose to Rs. 115.29 billion, reaching the highest level in well over 1 ½ years (since early January 2024).

In the money market, the total outstanding liquidity surplus in the inter-bank money market surged to Rs. 178.58 billion as at the week ending 12 September, from Rs. 144.37 billion recorded the previous week. This marks the highest weekly closing liquidity surplus in 13 weeks (since 13 June). The weighted average interest rates on call money and repo were recorded within the ranges of 7.86% and 7.86%-7.87% respectively while the Central Bank of Sri Lanka’s (CBSL) holding of Government Securities was registered at Rs. 2,508.92 billion as at 12 September, unchanged against the previous week’s closing level.

In an article titled “Sri Lanka Preview: GDP Growth Likely Picked Up in 2Q25,” Bloomberg Economics opined that Sri Lanka’s growth likely accelerated to 5.7% year on year in the second quarter of 2025 (2Q25), from 4.8% in the previous quarter (1Q25) — driven by the industrial and services sectors. The report forecasted a full year GDP growth rate 4.7% for the year 2025, after a 5% expansion in 2024. The report noted that this would be a significant turnaround from the hardship in 2022 and 2023, when the country defaulted on its foreign debt and its output shrank 9.5%. The official data is due today, 15 September.