Overall positive bank NOPs: Governor

Friday, 25 November 2022 00:22 - - {{hitsCtrl.values.hits}}

The Central Bank Governor Dr. Nandalal Weerasinghe yesterday declared an overall positive bank net open position (NOP) after being gripped by the worst monetary crisis in Sri Lanka.

Given the situation, the Central Bank in July gave some flexibility for banks on a prudential basis to manage without imposing strict NOP positions.

“There were some banks, but now we have allowed them to positive NOP positions. Because some of the SLDB (Sri Lanka Development Bond) settlements were from foreign currency and the Government is settling in Treasury bills and bonds for rupees,” he said at the post-Monetary Policy Review meeting yesterday.

Several banks were facing problems honouring swaps and also letters of credit, particularly to oil suppliers, amidst the severe foreign exchange crisis.

The CBSL prescribes maximum NOP limits for LCBs and closely monitors the activities in the domestic foreign exchange market to ensure the orderly functioning of the market.

“They are all within the limit now and we have given them the opportunity to declare their positive position,” Dr Weerasinghe said.

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