The Monetary Board of the Central Bank yesterday (Dec 5) decided to raise the current threshold for foreign investments in Treasury bills and Treasury bonds from 10 per cent of the outstanding Treasury bill and Treasury bond stock to 12.5 per cent.

Investment limit of foreign investments in Government Securities increased with the aim of supporting the growth momentum of the economy by enhancing resource availability, while also easing the domestic savings-investment gap and thereby mitigating any pressure on interest rates, says the Central Bank.

Meanwhile, foreign investors have expressed continued interest in investing in the Government Securities market, as a result of growing uncertainties in advanced economies and greater prospects in emerging economies, the Bank said.

The robust growth of credit extended by commercial banks as seen so far during the year is expected to continue, while the Sri Lankan economy grows at a healthy pace, the Bank further said.

At the same time, both headline and core inflation remain subdued. Nevertheless, the diminished level of excess liquidity in the domestic money market has caused an upward movement in short-term market rates in recent weeks, the Bank adds.

According to the Central Bank the Controller of Exchange will issue new Directions to Authorised Dealers accordingly.