EXPLAINER: What did we agree with ISB Holders?
Sri Lanka reached an agreement with ISB Holders.
The deal includes a haircut of 11% on accrued interest and 28% on nominal value (base case scenario).
Want to digest this in simple terms?
🧵Thread:
1/
@CSE_Media
@CBSL
Age is not a barrier!
@CBSL
Governor says he was about to register for
@CFAinstitute
exams, just before he got the call - inviting to assume duties as Governor amidst one of the darkest eras in
#SriLanka
.
Says age is not a barrier and you should enhance your skills in different
#SriLanka
gross official reserves were down to USD 5 million on 13 April 2022.
That’s why the preemptive freeze of external debt repayments were made, in order to avoid a hard default.
- Dr. Indrajit Coomaraswamy
#SriLankaCrisis
@CSE_Media
Good news: Inflation is falling.
Bad news: Prices won't.
Confused? Let me explain.
Inflation is the rate at which general price levels rise.
A fall in inflation means the rate of increase in prices, is slowing.
1/6
@CSE_Media
Early bird gets the worm. But it's the second mouse that gets the cheese.
My thoughts on the DDR presentation.
1. Almost too good to be true
LKR GSec DDR is applicable only to:
• T Bills held by CBSL
• T Bonds held by Superannuation Funds (SF)
While SFs is not defined in the
DDR: Is this the first and last?
All are waiting to see the size and shape of the DDR proposal.
There are many questions which remains to be answered. Some might be so, even after the initial proposal.
But for me, the only question that matters is:
This DDR is definitely the
Story of
#SriLanka
Migration in Charts
Did you know that Batticaloa district has the highest share of migration vs. population for both 2021 and 2022?
Keep reading for some interesting insights from our foreign employment stats.
1/10
Source:
@CBSL
H/t:
@nuuuwan
@CSE_Media
Gone, but not forgotten.
It has been three months since
#SriLanka
lost one of the brightest analytical minds.
This clip from 2017 shows the level of insight Amal had, even 6+ years ago, about our economy, interest rate and exchange rate cycles.
If you listen carefully, you’ll
Q: Do we need to close financial markets on 30 Jun?
A: Yes.
Let me explain.
DDR proposal is to be presented and debated in COPF/parliament.
This is the single most significant piece of information relating to the economy in our history.
While this is debated, there’ll be
"A journey of a thousand miles begins with a single step".
Humbled and happy to be designated as Head of Investment - Front Office at Ceylinco Life Insurance Limited.
Excited for this journey and thankful for everyone who were/are part of it.
Everyone talks about Treasury Bonds and their attractive 30%+ returns.
But what do you mean by TBs & jargons like coupons, YTM, etc? Is it actually risk free?
I've been working with TBs for the last 15+ years.
Here's how you can know what I know in 1.5 minutes.
@CSE_Media
1/12
A Tribute to Amal
Last 11 years, I interacted with Amal, and the company he built -
@FrontierResSL
.
As an analyst, Amal was sharp, savvy and confident - with courage of conviction.
As a person. he was humble and simple, with his feet firmly on the ground.
He never sought the
Some are worried about “Domestic Debt Restructuring (DDR)”.
Most are clueless what it is.
It’s good to hope for the best.
But best is to plan for the worst.
Keep reading to know all about DDR, in just 1.5 minutes.
1/12
@CSE_Media
How much T Bonds does EPF hold?
A lot, actually.
On a face value basis, they hold ~36% (LKR 3,174 Bn) of all T Bonds (8,722 Bn) in issue.
This ratio jumps when you move along the yield curve.
EPF holds:
• 61% of over 5-year T Bonds.
• 79% of over 10-year T Bonds.
• 82% of
Just for Fun:
30th Jun is now declared a special Bank holiday. 29th is a Bank holiday as well. 03rd July is a poya day.
That's a 5-day weekend, at least for bankers.
Ideal opportunity to announce the Domestic Debt Optimisation strategy and let the markets absorb it over the
#SriLanka
ISB holders Group insists that Domestic Debt is "reorganised"
This has both good as well as bad sides.
Let me tell you all about it, in English.
1/12
@CSE_Media
#EconomicCrisisLK
Taxes are Bad. Inflation is worse. Ignorance is worst.
Yes, taxes are up.
Yes, it’s very steep.
Yes, it could’ve been done at a slower pace.
The million dollar question is:
At what cost?
Want to know?
Let me tell you more.
@CSE_Media
#EconomicCrisisLK
1/6
Coffee, Economics and IMF - Simplified
Inflation
You DM someone for a coffee. They accept one year later. You end up paying 60% more.
Import Restrictions
You DM someone for a coffee. They accept one year later. You realise that all cafés are closed as they've run out of coffee
New Taxes: Inland Revenue Amendment Bill published
Personal Income Tax
• Tax rates range from 6%, 12%, 18%, 24%, 30% and 36%, in slabs of Rs. 500,000.
• Effective from 01.10.2022.
• For 6 months (01.10.2022 to 31.03.2023) the amounts are pro-rated by 50%
1/5
@CSE_Media
Why I joined
@Toastmasters
?
In 2014, I realised that while analytical skills makes me who I am, public speaking takes me to places which other skills cannot.
I realised that what go me here (as a manager) won’t get me there (as a leader).
I realised that public speaking is not
“Hard won gains of SL people over the last two years shouldn’t be undone” - Peter Breuer
@IMFNews
's Senior Mission Chief brilliantly explains his take on the different proposals and why continuation of the program matters.
• Achievement of program objectives is the key
• Sri
Never ask a barber whether you need a haircut.
You can apply this everywhere.
• If you want to buy a stock: DON'T ask a stockbroker. The brokerage is linked to your trading volumes, whether you are making a gain or not.
• If you want to buy GSecs: DON'T ask a Primary Dealer.
Are you rich?
If not, do you want to be?
Being rich doesn’t mean having an awful lot of money.
For me, being rich equals freedom.
Can you:
• use an iPhone without a back cover?
• get up in the morning, to do what you want?
• not get up in the morning, when you feel so?
•
USD vs. LKR:
@FitchRatings
vs.
@Bloomberg
Bloomberg Economics expect LKR to settle at about 309.
TL;DR
• 08 March: Bloomberg reported "Fitch maintained its forecast for USD/LKR = 390 by year-end".
• 09 March: Bloomberg Economics (BE) expect LKR at ~309.
1/4
@CSE_Media
Just for Fun:
30th Jun is now declared a special Bank holiday. 29th is a Bank holiday as well. 03rd July is a poya day.
That's a 5-day weekend, at least for bankers.
Ideal opportunity to announce the Domestic Debt Optimisation strategy and let the markets absorb it over the
Q: Why did T Bill rates spiked at today’s auction?
TL;DR
1. Last auction cut-offs were higher than expected
2. Reduced demand and larger supply
3. Tomorrow’s T Bond Auction
4. SLDB Conversions + LKR Outflows
5. Large Funding Needs
Let me explain you, in English.
1/7
@CSE_Media
Earned my first million!
Not money, but something far more valuable.
I crossed my first million impressions on
#Twitter
.
It's just a number. A small number.
But for me, it's million times touching eyes and hopefully, minds, to make an impact - to be a better person than
Everyone tells inflation is about to come down.
Does this mean Cost of Living (COL) falls?
Over the years, I’ve seen many confuse the two.
Does
#inflation
coming down mean COL falls?
NOPE.
Let me tell you why.
1/6
Coffee and Economics - Part 1
Just for fun, I simplified 20 economic concepts using coffee.
🧵Thread.
1. INFLATION
You invite someone for a coffee. They accept one year later. You end up paying 60% more.
@CSE_Media
DDO completed successfully!
DDO for T Bonds concluded with:
• 37% of Outstanding Principal Amount of Eligible Bonds (OPAEB).
• 84% of OPAEBs held by Superannuation Funds (SFs) as of end Jun 2023.
• 100% of SFs achieving the the participation threshold.
• Settlement date for
What are CBSL Reverse Auctions?
@CBSL
recommenced Reverse (outright purchase) Auctions (RAs).
They are, at times, incorrectly referred to as “Buy Back” auctions.
Usually, CBSL - on behalf of the Govt. - conduct auctions to sell (issue or reissue) GSecs (Government Securities).
Q: Coupon Rate vs. YTM - which is more important to an investor?
A: YTM.
Let me explain, with respect to Treasury Bonds.
Coupon Rate
• Coupon Rate (CR): Rate at which coupons are paid.
• Coupon Frequency (F): No. of coupons paid during an year. For T Bonds, F = 2
Explainer: Relaxing SDF and SLF Restrictions
@CBSL
yesterday relaxed SDF and SLF restrictions which were placed in Jan 2023.
Want to know what this means? In English?
Pls keep reading.
🧵Thread:
1/18
@CSE_Media
Why short-term rates are higher than long-term rates?
Usually, yield curve is upward sloping.
In English, this means usually, short-term rates are lower than long-term rates.
But, current FD or T Bill rates are exactly opposite.
3-month rate > 6-month rate > 12-month rate
FACT vs. FICTION:
@CBSL
Governor is NOT saying that prices of goods would fall.
He does say that (among other things) inflation will fall.
But inflation falling is NOT the same as prices falling.
Media has a responsibility to differentiate between the two.
#EconomicCrisisLK
Coffee, DMs and Economics
Inflation
You DM someone for a
#coffee
. They accept one year later. You end up paying 60% more.
Import Restrictions
You DM someone for a coffee. They accept one year later. You realise that all cafés are closed as they've run out of stocks.
1/5
Everyone talks about Treasury Bills & their 32%+ returns.
What do you mean by
• T Bills
• Jargons like yield, discount?
• Are they risk free?
I've been working with T Bills/Bonds for the last 15+ years.
Here's how you can know all that in just 1.5 minutes.
1/
@CSE_Media
What are the methods of DDR?
1. Maturity extension
2. Coupon cut
3. Haircut
4. Mix of all above
Food for thought
• Maturity extensions are usually coupled with a coupon cut.
• Haircut automatically leads to a coupon cut.
• Any combination leads to a time value (= NPV) loss.
Everyone talks of Domestic Debt Restructuring, but no one worked the numbers.
"Without data, you're just another person with an opinion"
I did the math, so you don’t have to.
TL;DR
A maturity extension is needed for ALL bonds, not just long-term ones.
1/
@CSE_Media
#SriLanka
The night is darkest just before the dawn.
We have gone through hell:
• 2017 Drought
• 2018 Constitutional crisis
• 2019 Easter Sunday attacks
• 2020 COVID-19
• 2021 Import + Fertilizer ban
• 2022 Financial Crisis
• 2023 Inflation + Tax hikes
• 2024 ?
Tough times never
Can we see a sustained sharp appreciation in LKR, soon?
Unlikely.
Even if everything becomes positive, a sharp appreciation in LKR is unlikely:
1.
@IMFNews
will impose reserve targets. Means CBSL needs to buy USD to build reserves. This creates new demand.
1/3
@CSE_Media
Bloomberg Economics: Proposed Debt Restructuring (DR) is positive for the economy
TL;DR
• Local lenders sharing losses of foreign creditors’ should make foreigners more willing to participate.
• Paves the way for a successful DR and swift economy recovery.
• The plan makes
Cat is out of the bag!
T Bonds to be RESTRUCTURED on a "voluntary basis".
@CBSL
and GOSL, at the presentation to creditors today, stated they are exploring options for a Domestic Debt Optimization.
What?
Why?
Who?
How?
Let me explain, in English.
1/7
@CSE_Media
#SriLanka
How deep banks can cut lending rates?
There is an outcry for banks to cut lending rates.
Looking at the year-to-date cut in deposit rates, that’s a fair call.
While Banks do have the space to cut rates, how deep can they go?
Not so long ago, deposit rates were around 24% - 30%
@CBSL
Governor:
• Last 5 days CBSL purchased USD 308 Mn from market
• If not, exchange (FX) rate would’ve crashed
• A flexible, market driven rate is preferred
• WEF 07 Mar 2023
- Guidance on FX rate will be dropped
- 15% mandatory conversion will be abolished
@CSE_Media
First time is luck. Second time is a coincidence. Third time is a pattern.
✅ 2021 - 🥇Gold
✅ 2022 - 🥇Gold
✅ 2023 - 🥇Gold
Humbled and honoured to have made the presentation to judges - along side Dhiranjan Canagasabey - to win
@Slim_Srilanka
Service Brand of the Year award
At the current rate of which T Bill stock is snowballing, it may become difficult to exclude them from being restructured.
Let me explain why.
In March, Govt. announced that T Bonds will be restructured, on a voluntary basis.
Then, they stopped issuing T Bonds.
It was also
Why EPF return in 2022 was low?
EPF paid 9% to members in 2022 (see my QT below).
Meanwhile:
• Avg. inflation was 46.4%
• AWFDR was 18.49%
• Avg. 5Y T Bond was ~22%
Seems 9% is way below. It definitely is.
But, purely from an investment perspective (see my notes below), we
@CBSL
Governor on
#EconomicCrisisLK
• A result of bad policies + structural issues
• Any fix won't be overnight
• It'll be a painful process
• Pain should be shared fairly & equally - both domestic + external
• Unfair to ask external creditors to bear all the pain
@CSE_Media
The Elephant in the Room:
Why hike policy rates, if market rates are not supposed to?
• To show commitment to bring down inflation
• To anchor inflation expectations and uncertainty
IMF program is more important than a small difference in opinion.
@CSE_Media
@nisthar_cassim
Summary of CBSL Annual Policy Statement - 2024
Yesterday,
@CBSL
unveiled their APS for 2024.
Want to know the key Monetary Policy strategies for 2024 and beyond? In English?
Pls keep reading.
🧵Thread:
1/
@CSE_Media
Bloomberg Estimates USD/LKR Fair Value (FV) at 288
• This is as of end-2022, up from 318 six months earlier.
• Gain reflects a swing in current account to a surplus of 0.7% of GDP from -4.4%.
• Due to data lags, end-2022 estimate is the latest. FV has probably risen since,
Short. Sweet. Summarised.
@CBSL
today announced the 1st Monetary Policy (MP) Review for 2023.
You can either read the long document (link below) or my 4-minute summary below.
🧵
1/12
@CSE_Media
#SriLanka
#EconomicCrisis
PSA: Rome wasn't built in a day, but Hiroshima was destroyed in one.
Don't get carried away by high returns. With higher returns, comes higher risk.
This happens mostly when market rates falls (such as now), and everyone is looking for extra yield.
In case of a failure of a
Money released from
@CBSL
SRR cut hits the market tomorrow
TL;DR
“The long run is a misleading guide to current affairs.
In the long run we are all dead”.
What would be the impact from the recent SRR cut?
Let me explain, in English.
1/
@CSE_Media
To everyone who wants me to take sides:
I don't.
Then only I can do what I have to, what I want to.
No matter how unbiased my views are, an anonymous dude can take it out of context and blow it out of proportions.
I've seen this play out many times.
My mission is to educate
@theGayan
@CBSL
Ah ok thanks! You seem to be very impartial on bond valuations
And debt restructuring so I thought I’d ask the question! These are very serious allegations and we need impartial and transparent responses!
IMF 2nd Tranche ✅
TL;DR
• Allows for an immediate disbursement of USD 337 Mn to support economic policies and reforms.
• Performance under the program was satisfactory. All quantitative performance criteria for end-Jun were met, except one on expenditure arrears.
• All
EXPLAINER: How inflation fell towards zero?
Mar 2024 CCPI YoY inflation fell to 0.9%, from 5.9% in Feb.
Want to know how? in English?
🧵Thread.
1/11
@CSE_Media
What is "ISIN"? LKB00325G013?
ISIN stands for International Securities Identification Number.
@CBSL
uses ISINs to name Govt. Securities.
Each ISIN has an interesting composition.
E.g. LKA09124C086
• LK: Country code of Sri Lanka
• A: Security type (T Bill)
• 091: Original
CBSL accepted T Bills at higher rates.
Does this mean monetary policy is no longer expansionary?
No.
@CBSL
Governor explained this nicely at a recent press conference.
• T Bill auctions are independently determined - based on Govt. cash flow needs.
• There’s no relationship
Difference between investment decision making vs. review?
Sully is a movie based on 2009 emergency landing of US Airways flight 1549 on the Hudson River, in which all 155 passengers plus crew survived.
In a subsequent investigation, National Transportation Safety Board suspects
SRR Cut: Banks to earn at least ~LKR 30 Bn additional income annually
• SRR cut releases funds (~LKR 200) which was idling in
@CBSL
at 0% interest.
• Banks can now earn a significant return on those funds by lending (or investing).
• This is an additional income for the
@CBSL
cuts SRR to infuse LKR 200 Bn liquidity!
CBSL on 08 Aug 2023, decided to reduce the Statutory Reserve Ratio (SRR) by 200 basis points, from 4% to 2%, w.e.f. 16 Aug.
This reduction is expected to release around LKR 200 Bn of liquidity to the money market.
@CSE_Media
"You can fool some people all of the time, and all people some of the time.
But you can't fool all the people all of the time - unless you're an economist”.
I’ve seen few factually misleading comments on the recent CCPI Base Year (BY) change.
Let me explain why they are, in
There is no decrease in inflation.
Census Dept changed the yardstick.
They SUDDENLY replaced the "2013-index" with a "2021-index".
It's clear that CHANGE in the measurement yardstick, has affected the "inflation" numbers very significantly.
#SriLanka
’s Catch-22 in Domestic Debt Restructuring
• USD 1.6 Bn of arrears are due to ISB Holders (ISBHs).
• This is 83% and 59% of the arrears, due to Commercial Creditors and total creditors, respectively.
• With these numbers, it’s clear that ISBHs will have a upper
Not everyday you wake up:
• in a foreign country!
• on a vacation!
• adding 100+ followers!!!
Much appreciate this grand gesture
@Indrajithek
. Speaks volumes on your kindness and character, helping out a fellow creator, who's just picking up from greats like you.
I'm out of
What shall I do when interest rates are falling?
If you have noticed, market rates have fallen, all the way from 30%+ to (almost) single digits.
@CBSL
led the way by cutting rates 650bps in 2023.
🧵Thread:
Keep reading to see where rates might be headed.
1/10
@CSE_Media
IMF on Domestic Debt Restructuring
• Currently, debt is unsustainable
• It's Govt's responsibility to meet debt sustainability targets
• Govt has to decide whether dom. debt is restructured, or not
• IMF only looks at the impact to economy & financial stability
@CSE_Media
Awareness vs Communication
Technically, the statement is accurate. LKR did depreciate 45% in 2022.
But most find that to be 83%
Either:
• media should educate public on technicalities/interpretation, or,
• communicate things in a simple way anyone would understand
@CSE_Media
Are you trying to understand
#SriLankan
financial markets?
Good luck with that!
Let me tell you why.
If someone looks at the money market overnight (O/N) liquidity figures for Jan, they’ll draw many conclusions.
But almost all would be wrong, or worst, crazy.
1/6
@CSE_Media
Light at the end of the tunnel.
@IMFLive
has approved
#SriLanka
's ~USD 2.9 Bn Facility.
This is just the first step.
But even a journey of a thousand miles begins with a single step.
Always celebrate small wins.
So, today, let's celebrate.
Tomorrow, back to work.
@CSE_Media
Finally, a big step in the right direction.
It takes courage to hike rates by 7% in your first meeting.
Might be the biggest hike ever in our history.
A series of such bold moves needed to see light at the end of the tunnel for
#SriLankaEconomicCrisis
Better late than never.
The Central Bank of Sri Lanka Significantly Tightens its Monetary Policy Stance to Stabilise the Economy
SDFR - 13.50%
SLFR - 14.50%
For more details -
#SriLanka
#CBSL
#MonetaryPolicy
IMF on Sri Lanka
@IMFNews
World Economic Outlook excludes projections for countries, including SL, due to on-going debt negotiations.
In their own words:
“People of SL have shown remarkable resilience. In the face of enormous challenges, SL has made commendable progress in
Everyone talks about T Bills, T Bonds and their 30%+ returns.
Want to all about T Bills, Bonds, auctions and their risks?
I've been working with them for the last 15+ years.
Here are my 4 threads which you can know all that - in just 4 minutes.
1/6
#Economy
#SriLanka
No more
@CBSL
rate cuts for a while!
After today's cut, CBSL plans to pause.
Policy rates were cut by a total 650 bps during last 5 months.
• 01 June 250bps
• 06 July 200bps
• 05 Oct 100bps
• 24 Nov 100bps
CBSL wants the full impact of these cuts to be passed on to the
Humbled and honored to be recognised as a
@LinkedIn
Community Top Voice!
I thank all my followers because without them, I am none.
Now, back to work.
P.S.
If you are not among my 8,800+ followers on LinkedIn, pls follow me via the link in comments.
@CSE_Media
#LinkedIn
Ar today's
@Bloomberg
Sri Lanka Economic Forum, Ankur Shukla of Bloomberg Economics expects
@CBSL
to cut policy rates by another 250 basis points by end 2023.
@CSE_Media
Fitch Ratings: DDO is a Significant Step for Resolving Bank Uncertainty
TL;DR
• Exclusion of banks' LKR GSecs will alleviate some pressure on already stressed capital positions due to weakening loan quality and LKR depreciation.
• Expect banks to opt for the choice to convert
CBSL Governor explains how last T Bond maturity was settled
• Govt. Treasury can no longer rely on monetary financing
• They have now built up a cash buffer
• This allows to smoothen any funding shortfalls
• If rates are high, they have the flexibility to utilise this buffer
Why DDO deadline was extended 3 times?
Dr. Indrajit Coomaraswamy explains, in simple terms.
H/t:
@TellimerHQ
and
@NDBSecurities
joint webinar:
"Turning the Page in
#SriLanka
: Beyond the Sovereign Debt Crisis"
@CSE_Media
DDO Deadline for T Bonds extended (again) by 2+ weeks!
• Original deadline: Jul 25
• 1st extension: Aug 11
• 2nd extension: Aug 28
Govt. needs to wrap this up before the LKR 187 Bn T Bond maturity due Sep 01, 2023.
The extension is likely due to pending changes in tax laws
Lies, damned lies, and statistics
Pessimists: "Foreign holdings are down 75% from Sep 2014"
Optimists: "Foreign holdings are up 6,546% from Dec 2021"
Beauty of statistics is that none of them are wrong.
Which camp are you in?
@CSE_Media
#SriLanka
How did
@CBSL
fund T Bill maturities today?
LKR 291 Bn worth T Bills matured today, Mar 24th, 2023.
TL;DR
CBSL retired LKR 49 Bn of their holding of Govt. Securities, which is a proxy for amount of money printed, while T Bill rates fell over 150 bps.
This is a good trend.
The
No more T Bond auctions?
Seems
@CBSL
has decided not to conduct T Bond auctions, until the Domestic Debt Restructuring (DDR) strategy is announced.
For the period 01st, May - Jun:
• Only one T Bond maturity of LKR 104 Bn ("A”) is due.
• ~LKR 176 Bn (“B”) coupons are also due.
I told you so.
Today,
@CBSL
retired (= unprinted)* LKR 108 Bn, with the funds raised from the market through the T Bill auction.
* Unprinted = retiring T Bills held by CBSL (= money printed in the past), by raising funds from the market, through issue of T Bills.
@CSE_Media
@CBSL
printed LKR 178 Bn yesterday.
• This is for repaying the T Bond maturity due May 15, 2023, plus coupons.
• Most likely to be reversed on Friday (May 19), from the funds raised via the T Bill auction.
@CSE_Media
Rs. 1,787,900,000
That’s how much
@CBSL
earned on April 12, as interest income on their Govt. Security portfolio - for a DAY!
Annualised* at current yield of 25.1%*, that’s a whopping Rs. 652.5 Bn.
For reference, BOC’s gross int. income for 2022 was Rs. 456.2 Bn.
Flip side:
"Stock Market is a place where people with money meet people with experience.
After a while:
• people with experience get the money,
• people with money get experience".
Higher return means higher risk. But higher risk doesn’t necessarily mean higher returns.
There is no free
CBSL Governor expects an one-off jump of around 2% - 3% in inflation, due to VAT hike
• Dec 2023 inflation rate was 4%
• This might jump to ~6% end Jan
• One-off increase will gradually fade away
• Expects the rate to stabilise around 5%
Source:
@CBSL
Financial Stability
A slip on the pavement is better than a slip of the tongue.
Every year, I compete at
@Toastmasters
Table Topics contest.
Table Topics is an impromptu speech, where you have to speak ~2 minutes on a topic.
Easy, right?
You just prepare for that topic in advance and nail it.
Better late than never!
IMF EFF 1st Review: ✅Done
@IMFNews
staff and
#SriLanka
Govt. have reached a staff-level agreement to conclude the 1st review of the EFF program.
SL will have access to SDR 254 million (~ USD 330 mn) in financing once the review is approved by IMF
Bonds: Bigger, Better, Bolder!
The biggest T Bond auction, ever!
@CBSL
announced a LKR 180 Billion T Bond auction, to be held on March 13, 2023.
Yields likely to fall, unless someone rocks the boat with news on Domestic Debt Restructuring.
@CSE_Media
#SriLankaEconomicCrisis
Déjà Vu: SDF restrictions are back!
@CBSL
restricted access to its Standing Deposit (SLF) and Standing Lending Facility (SLF) to Banks.
Last time this happened was in Sep 2014.
Let me tell you:
• Why?
• What?
• How?
in a simple way.
1/13
@CSE_Media
#EconomicCrisisLK
@CBSL
limits access to Standing Deposit and Lending facilities
Most likely to
• address the mismatch in liqudity in money market, and,
• limit arbitrage opportunities against Treasury Bills.
New restrictions effective from 16th Jan.
More on this later.
@CSE_Media
Why did yields spike at today’s T Bond auction?
Market rates on T Bonds jumped during last week. Today’s auction just made it official.
Here’s my interpretation.
🧵
DISCLAIMER:
I could be far off from actuals (which no one publicly knows). Read at your own risk.
1/
@CSE_Media
NEVER start a speech with an excuse.
Sorry I was late due to traffic.
Sorry I was told just now that I'm supposed to speak.
Sorry I won't be talking long.
Those are some common ways most start a
#speech
.
It sucks.
Audience doesn't care about your excuses.
1/4
#publicspeaking
The early bird gets the worm.
But the second mouse gets the cheese.
Hopefully,
@IMFNews
will step up and start calling the shots by approving the program under the Lending into Official Arrears policy.
As we always say, better late than never.
@CSE_Media
#SriLanka
Everyone talks about inflation being down. But no-one cares to see where it's headed.
@CBSL
also takes inflation expectations seriously.
Yes, inflation have fallen from its all time highs - which is good.
But it bottomed out in Sep. Inflation rose by 0.9% and 1% Month on Month