Recent media reports suggest that the Central Bank of Sri Lanka (CBSL) “printed” Rs. 100 billion on October 25, 2024, through its Open Market Operations (OMOs). However, this interpretation is inaccurate. The liquidity provided through OMOs is a routine central bank activity designed to maintain sufficient liquidity within the banking system, aiming to stabilize short-term interest rates and support price stability. Therefore, equating OMOs to “money printing” misrepresents their purpose and function.
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