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Sri Lanka injects overnight cash at 6.19-pct
Sri Lanka injects overnight cash at 6.19-pct
Aug 20, 2015
ECONOMYNEXT - Sri Lanka's Central Bank has accepted bids to inject 7.1 billion rupees in overnight money at 6.19 percent through a reverse repo auction, dealers said, as liquidity ran out in money markets amid dollar outflows sending overnight rates up.
Dealers have bid around 6.2 percent at the auction, despite market rates being around 6.60 percent earlier in the day.
Analysts say the unusual collusive behaviour has set a new policy rate of around 6.2 percent. In a well-functioning market auction rate should have been closer to the 7.50 percent ceiling policy rate corridor.
Sri Lanka last reverse repo auction was held on March 27, to briefly inject money when the Central Bank was at the same time withdrawing cash though term repo auctions. (Colombo/Aug20/2015)
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