Market interest rates are unlikely to experience volatility through public debt-servicing requirements, as the Central Bank and the Sri Lankan government are better prepared to mange domestic and foreign debt next year with the planned implementation of the Liability Management Act and the buffers being built up by the state.
“The liability management exercise, the fundamental reason is to smoothen out the volatility in interest rates, in terms of rather than going to the market at the times of maturities and trying to raise that money, large amounts in a day or two,” CBSL Deputy Governor Dr. Nandalal Weerasinghe said.
He was responding to a question on whether interest rates will increase next year due to government debt service requirements, during a press conference last week.
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