ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Sri Lanka- After the Holocaust

August 18, 1983 with through Open Market Operations. However, Open Market Operations beins what they are in this country, the authorities cannot regard them as a monetary instrument. Banks flush with funds, left to themselves, would, therefore, have invested in Treasury Bills, which would have caused expansion in bank credit to government beyond the limit set in the IMF's conditions for the current year. In the circumstances, the Reserve Bank seems to have used the CRR ys a proxy for Open Market Operations, making it clear that the increase in CRR would be reversed whenever the need arose. Accordingly, the rate of interest on the reserve deposits was also raised to 9 per cent, the then-prevailing highest coupon rate. Banks have further been assured that those especially severely affected by the measure would be selectively provided with refinance. Banks are on the whole pleased, for they have been provided a convenient instrument for holding their liquid funds temporarily at a moderate yield.

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