Public Debt Management

The Central Bank maintained Sri Lanka’s impeccable record of timely debt service payments during the ongoing stress situation. A large amount of funds was mobilised from the domestic money market by the Central Bank on behalf of the government to meet debt service requirements as well as to meet essential expenditure of the government.

The Central Bank also provided required financing to the government arising from the shortfall in government revenue and increased expenditure. This funding enabled the government to provide social security payments for a large share of the population, make payments in relation to essential health and other public services, and to make regular debt service payment obligations.


13 May 2020 Administratively issued Treasury bonds to the tune of Rs. 100 billion on book value basis to allow adjustments in other instruments of government's cash flow management such as the overdraft with state banks.
04 May 2020 Initiated the provision of short term liquidity assistance for Standalone Primary Dealers to manage their liquidity on a short-term basis.
03 April 2020 The Central Bank purchased Rs. 60 billion of Treasury bills from the primary market to facilitate the government to settle its dues.
30 March 2020 Initiated the provision of long term liquidity assistance to Standalone Primary Dealers in addition to the overnight facility.
23 March 2020 The Central Bank purchased Rs. 50 billion of Treasury bills from the primary market to finance the establishment of the energy stabilisation fund by the government.
13 March 2020 The Central Bank purchased Rs. 50 billion of Treasury bills from the primary market to fulfill urgent cash requirements of the government under exceptional circumstances.

Additionally, number of financing initiatives and debt management arrangements were introduced.

• Conducted regular Treasury bill, Treasury bond and Sri Lanka Development Bond auctions without interruption amounting to over Rs. 1.3 trillion during the first seven months of 2020. During mid-March 2020 to end July 2020, auction based financing amounted to over Rs. 900 billion. Further, deviating from the established practice of conducting a single monthly Treasury bond auctions, frequency of Treasury bond auctions in a month were expanded to two during May, June and July 2020 to finance government’s funding requirement.

• Accommodation of short-fall amounting to around Rs. 110 billion arising from maximum yield rate of acceptance announced for T-bills for the period from March to 05th August 2020.

• Issuance of T-bills for the purpose of settling the Provisional Advances by the government amounting to Rs. 239.9 billion on face value basis during June 2020.

• Amidst the lockdown, Sri Lanka's unblemished record of debt service payments was maintained, with debt service payments amounting to over Rs. 2.0 trillion during first seven months of 2020. During mid-March 2020 to July 2020, the Central bank has serviced 816 loans.

• Debt repayments of the government are usually settled using the foreign reserves. As the government could not raise adequate liquidity owing to the unprecedented adverse market conditions, the Central Bank continued to provide liquidity from the foreign reserves of the Central Bank since 08 April 2020. Accordingly, during the period of 08 April to 22 June 2020, the Central Bank has settled US dollars 1,007 million of government debt utilising the Central Bank’s foreign reserves.

• LankaSecure System of CBSL processed 34,159 printed statements including E-statements (for customers who opted for the facility) in total, as a part of information of the investments in Government Securities during the first seven months of 2020. Further, CBSL managed to process 11,403 statements during the three months period of COVID - 19 lockdowns (16.03.2020 - 17.06.2020).

• During first seven months of year 2020, 76,969, email alerts and 22,871 SMS alerts has been generated by the LankaSecure for each movement in securities accounts of the LankaSecure System. Such real-time notifications to the customers, generated in the system during the lockdown period (16.03.2020 - 17.06.2020) were 26,162 email alerts and 7,282 SMS alerts. During the period where island wide curfew was imposed from 20 March to 26 May 2020, the LankaSecure System has operated a total of 35 days out of 38 working days.