The Central Bank (CBSL) has rejected an opposition allegation over its latest treasury bill sale.
It is unfortunate that accusations are being made publicly without authenticating third party information or due to ignorance, said a senior legal officer attached to the CBSL.
He was responding to SJB district organizer Niroshan Padukka having cast doubts over the CBSL’s sale of treasury bills with a total worth of Rs. 200 billion, saying that it should have known that interest rates would be brought down by 2.5 per cent on May 31.
While speaking to the media, Padukka called for an immediate audit inspection of the matter and said the CBSL should not be allowed to get swindled once again.
The CBSL legal officer who spoke to us found the accusations to be disheartening, saying that false accusations are being made at a time when the collapsed economy was being revived under difficult circumstances.
He noted the CBSL no longer followed ‘private placements’ in its treasury bill sales, but pursues a fully transparent process to fulfill fiscal requirements of the state.
That is being done by making additional purchases at treasury bill auctions at the average interest rates.
In the two ensuing auctions that follow the main one, all bidders can apply to buy the treasury bills on offer.
Bill transfers are made to successful bidders in a completely transparent manner.
At the auction in question, the same process was followed, according to the officer.
The decision to reduce the policy interest rate by 2.5 pc was made at a meeting of the CBSL monetary board in the afternoon of May 31.
The auction took place earlier on the same day.
The treasury bill tender committee does not have any monetary board member.
Therefore, the tender committee members were unaware of the monetary board decision.
The officer said there was no truth whatsoever in the claims made about the interest rates.
It is normal that fluctuations in interest rates could either be advantageous or disadvantageous to the market players.
But, with the auctions taking place in a completely transparent manner, there is no room for any party or parties to gain undue advantage from interest rate fluctuations, the CBSL legal officer added.
