Banks issued with fresh orders to refrain from buying Lankan ISBs

In a fresh Banking Act Direction, the Central Bank has informed all licensed banks and National Savings Bank (NSB) to refrain from purchasing Sri Lanka international sovereign bonds (ISBs) with effect from March 23, 2021 until April 9, 2021.

“The Central Bank of Sri Lanka with a view to easing pressure on the exchange rate and considering the substantial amount of possible/potential outflow of foreign exchange by bank and its impact on banks’ risk management. Licensed commercial banks and National Savings Bank are hereby informed to suspend the purchase of Sri Lanka International Sovereign Bonds with effect from 23 March 2021 until 09 April 2021,” the Direction said.

The rupee closed firmer at Rs.198.50/199 levels against the US dollar in one-week forward market yesterday, after hitting a new los of Rs.202/203 levels on Wednesday.