About this Website

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• Feedback
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• Alternative Means of Obtaining Documents
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• What is Central Bank of Sri Lanka?
  It is a statutory body that is established under the Monetary Law Act initially enacted by Act No. 58 of 1949.  It is the monetary authority, which has powers and functions and responsibilities necessary for the purpose of establishment, administration and regulation of the monetary system of Sri Lanka.  The two core objectives of the Central Bank, as stipulated in the Monetary Law Act, are: achieving of the economic and price stability and the financial system stability of the country through effective monetary policy and prudential supervision and regulation of banking institutions.
• Why do we need a Central Bank?
  The maintenance of the stability of the general price level and the financial system is a pre-requisite for sustainable long-term economic growth of any country.  To achieve these goals, an autonomous institution with powers to implement monetary policy and introduce prudential regulation of banks is needed.
• Who owns the Central Bank?
  The Central Bank is owned by the Government of Sri Lanka, but it enjoys autonomy with respect to its budget (need not be approved by Parliament) and policy (can take appropriate monetary policy without consulting the Government). 
• How does a Central Bank differ from Commercial Banks?
  The Central Bank being the monetary authority is at the apex of the financial system functioning as a banker to commercial banks.   It provides reserves to the system.  Commercial banks are banking institutions with power to maintain current accounts and providing all commercial banking services to their customers.
• What is the Monetary Board? 
  The Monetary Board is the highest policy making body in the Central Bank responsible for the management, operations and administration of the Central Bank.
• Why has the Monetary Board been incorporated, instead of the Central Bank?
  The John Exter Report on which the Central Bank has been established indicates that the Monetary Board should be incorporative, since in legal theory, it is better to incorporate a body of persons rather than an institution.  It also governs perpetual succession.
• Who are on the Monetary Board and how are they appointed?
  Initially when the Monetary Board was first incorporated in 1950, it consisted of only 3 members namely;

  the Governor of the Central Bank who shall be the chairman of the Board; the person holding office for the time being as Secretary to the Ministry of the Minister in charge of the subject of Finance; and A  third Member appointed by the President

  on 18th December 2002, the Monetary Law Amendment Act No. 32 of 2002, came into operation and consequent to an amendment to Section 8 (c), the composition increased to five members to make it more representative.  They are:

  the Governor of the Central Bank who shall be the chairman of the Board; the person holding office for the time being as Secretary to the Ministry of the Minister in charge of the subject of Finance; and three members appointed by the President on the recommendation of the Minister of Finance with the concurrence of the Constitutional Council.

• Who is responsible for the conduct of monetary policy ?
  Monetary policy is the means whereby a central bank attains price stability in the domestic economy by regulating the cost and the availability of money (i.e., interest rate and credit availability).  In Sri Lanka, the authority responsible for the formulation and implementation of monetary policy is the Central Bank of Sri Lanka (CBSL).
• What are the instruments used by the Central Bank to conduct its monetary policy?
  The CBSL possesses a wide range of tools to be used as instruments of monetary policy.  The main ones are the statutory reserve ratio (SRR) on commercial bank deposit liabilities,  Bank rate, open market operations (OMO),  refinance facilities, quantitative restrictions on credit, ceilings on interest rates and moral suasion. The CBSL has the freedom to choose appropriate instruments for meeting particular situations as demanded by the existing economic conditions and prevailing situation in the financial markets.  By using the monetary policy tools at its disposal the CBSL has the ability to influence the rate of monetary expansion, thereby promoting price stability in the economy.  These policy instruments are expected to provide the desired results by influencing the cost and availability of money.  At present, open market operations and statutory reserves are the major policy instruments used by the CBSL, as in the last decade or two the Bank has opted out of using policy instruments such as quantitative ceilings and refinance facilities.
• What is the Bank rate? 
  Bank rate is the rate at which the Central Bank provides credit to commercial banks as the lender of last resort, against specified securities, to meet their liquidity requirements. 
• What are Open Market Operations ? 
  Open Market Operations (OMO) are the market based monetary operations conducted by the Central Bank using acceptable securities to control market liquidity. OMO involves action taken by the Central Bank to increase or siphon-off liquidity to be in line with the Bank’s monetary programme.  The Bank can use two types of securities for this purpose.

  government or government guaranteed securities; Central Bank’s own securities.

• What is SLIBOR ? 
  The acronym SLIBOR stands for Sri Lanka Inter Bank Offered Rate. SLIBOR is an average of interest rates quoted by selected commercial banks at which they are willing to offer funds for different maturities in the call money market. Based on these quotes, SLIBOR for one day, seven days, one month, 3 months, 6 months and 12 months maturities are computed and published daily  by the Central Bank
• What is Exchange Rate ?
  Exchange rate is the price of one currency (eg the US dollar ) in terms of another currency (eg the Sri Lankan Rupee). Exchange rates can be quoted directly or indirectly. Most countries use the direct method. With this method, the exchange rate shows how much of local currency has to be exchanged for one unit of the foreign currency. For example, if one has to pay Rs. 100 to obtain one US dollar, the direct quotation is $1=Rs. 100. With the indirect method, the exchange rate is expressed as the amount of foreign currency that is required to purchase one unit of the domestic currency. In the above example, the indirect quotation is thus Re.1=$0.01

• What is financial system stability?
  Financial system stability can be defined as the ability of the financial system to perform its key functions such as the allocation of resources from savers to investors, spreading risks and settling payments, efficiently, at all times, including in the event of adverse shocks and stress situations.  A stable financial system is one in which the financial institutions and markets and the payments system are functioning effectively and there is an absence of banking, currency, payments and settlements crises.
• Why is the maintenance of financial system stability an objective of the Central Bank?
  A stable financial system is necessary, on the one hand, for the effective  transmission of monetary policy and the smooth operation of the payments system.  Financial instability, on the other hand, is expensive in terms of output losses and fiscal costs and will erode public confidence in the financial system.
• How does the Central Bank maintain financial system stability?
  The Central Bank discharges its responsibility by establishing the required legal framework, regulating and supervising key financial markets, overseeing the payments and settlements system, acting as lender of last resort and by the surveillance of the entire financial system.

Government Debt Securities

• What are the available debt securities issued by the government of Sri Lanka for foreign investors?
  Two types of debt securities issued by the Government of Sri Lanka are available for foreign investors namely;
  

  Sri Lanka Development Bonds >> Local Treasury Bonds >>

• What are the marketable debt instruments issued by the Government of Sri Lanka for local investors?
  Treasury bills >> and  Treasury bonds>> are the marketable debt instruments available for local investors.
  
• How can local and foreign investors obtain the market details on debt securities issued by the government of Sri Lanka?
  Market details can be obtained from newspapers and this website.

• How do I purchase publications released by the CBSL?
  Central Bank publications can be purchased from
  1. Leading bookshops in the country.
  2. Regional Offices in Matale, Anuradhapura and Matara

Overseas customers should make payment in dollars by a cheque/ draft payable in New York and sent to The Director, Communications Department, P O Box 590, Colombo 01,
Sri Lanka.
Sales Information >>

• How do I subscribe to Satahana/News Survey/ Monthly Bulletin?
  Readers can subscribe to these publications ( For one year or half a year )  by paying the subscription payment by cheque / money order/ draft in favour of Director Communications, Central Bank of Sri Lanka.
  Subcribtions >>
• How do I renew my Satahana/News Survey/Bulletin subscription ?
  The subscriber can renew his/her subscription at the end of the term by paying the due amount for the desired period.
• Where can I find a listing of all CBSL publications ?
  The list of Central Bank’s publications is published in this website. The same is printed on the back cover page of the Monthly Bulletin.
  Price List >>
• Does the CBSL give presentations to senior school students and teacher groups ?
  Yes. Under its educational programmes, the Communication Department arranges for Lectures/workshops/seminars. If you wish to have such a presentation in your school, you can make a written request to the Director, Communications. Subject to the availability of resource person(s), the Communications Department will oblige your request.
• Opening hours of the Currency Museum?
  The Currency Museum is open to the public from 8.30 a.m to 3.30 p.m. on week days except for public and bank holidays.
• Public Awareness Programmes
  The Central Bank, under its public awareness campaigns, takes part in educational and trade exhibitions organised by various ministries. The Currency Museum, EPF inquiries, exhibits on development projects conducted by the Regional Development Department of the Central Bank and a publication sales outlet are the main attractions at the CBSL stall.
   
  The Communications Department also produces video documentaries to educate students on functions and responsibilities of the Central Bank and the public on various development activities and services rendered by the Bank.