Rs. 125 Bn T-Bill Auction Fully Subscribed; Rates Continue to Drop 📉

• Monetary Policy Update The Central Bank of Sri Lanka (CBSL) maintained the Overnight Policy Rate at 7.75% for the fourth consecutive time. The SDFR and SLFR remain at 7.25% and 8.25% respectively, aiming to steer inflation toward a 5% target by 2H 2026. • T-Bill Auction Results The weekly auction was 100% subscribed, raising the full Rs. 125 Bn offered. Weighted average yields declined for the second week across all tenors: 91-Day: 7.84% (-9 bps) 182-Day: 8.26% (-10 bps) 364-Day: 8.36% (-11 bps) • Macroeconomic Indicators Economic Growth: The economy grew by 5.0% in 9M 2025. Inflation: CCPI remained at 2.1% in Dec 2025, despite food price pressure from Cyclone Ditwah. External Sector: Gross Official Reserves reached US$ 6.8 Bn by end-2025. The Rupee, which depreciated 5.6% in 2025, remains stable in early 2026. Credit: Notable expansion in private sector credit, driven by vehicle imports and rising economic activity. • Market Liquidity & Future Outlook Money market liquidity hit a one-year high surplus of Rs. 211.53 Bn. All eyes are now on today’s Rs. 205 Bn Treasury Bond auction spanning 2030–2037 maturities.