Sri Lanka’s external sector recorded a modest performance during November 2016. The trade deficit widened as a result of higher import expenditure amidst a decline in export earnings, albeit marginally, during the month of November 2016. The significant increase in import expenditure in November 2016 was mainly due to the increase in expenditure on intermediate and investment goods. Earnings from tourism continued to record a healthy growth while workers’ remittances declined marginally during the month. The government securities market witnessed a net outflow in the month of November, while net inflows to the Colombo Stock Exchange (CSE) and long term loan proceeds to the government supported the Balance of Payments (BOP) in November 2016.

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The Central Bank of Sri Lanka wishes to make the following clarification on the process it has followed in relation to Section 4 of the Registered Stock and Securities Ordinance, No 07 of 1937 (RSSO) as amended with regard to the issuance of government securities.

1. The RSSO was enacted for the purpose of issuing registered stocks, Government promissory notes, Bearer bonds and Treasury bonds.

2. The auction based issuance of Treasury bonds on behalf of the Government of Sri Lanka commenced in 1997. With the commencement of the public auction through the primary dealers in Treasury bonds, the price and volume of Treasury bonds were determined through market forces. Therefore the related Gazette notifications were issued after the Treasury bond issuances, but on dates and Gazette numbers which were pre-reserved. The Central Bank of Sri Lanka has taken the following measures to comply with the intent of the law.