Sri Lanka’s Government cash reserves had dipped below its lower limit threshold of Rs. 1 trillion in December of 2025, as it had made more than Rs. 500 billion in payments during the month, Ministry of Finance, Planning and Economic Development Deputy Secretary to the Treasury A.K. Seneviratne informed the Committee of Public Finance (COPF) during its last meeting.
“In December we made payments valued more than Rs. 500 billion, which included a Rs. 45 billion payout for the senior citizens; the restructuring of the SriLankan Airlines bond and capital payments. At one go, around Rs. 500 billion had been made in payments,” Seneviratne said, referring to the implementation of a special interest scheme for senior citizens introduced within the year, and the restructuring of a bond in connection to the national carrier.
“The buffer’s minimum was crossed and it reduced to Rs. 750 billion, that is why this borrowing was issued, in order to maintain that buffer,” he said, in response to a question posed to him on the issuing of a borrowing during the month of December.
“The Rs. 1 trillion [buffer] had reduced to 750 billion. This has once again picked up and reached Rs. 840 billion. At that point, since we could not continue using the buffers anymore, we resorted to borrowing,” he said.
According to President Anura Kumara Dissanayake in December of 2025, Sri Lanka was to make use of Rs. 1.2 trillion in cash buffers in the Treasury for recovery and relief. He stated so, when seeking parliamentary approval for the supplementary spending package estimate of Rs. 500 billion, that was meant to be utilised for recovery and relief.
According to the Financial Stability Review for the second quarter of 2025 released by the Central Bank in October of 2025, by the end of the second quarter, the government had Rs. 1 trillion in state banks, with 80.7% in term deposits maturing within the year.
“At the beginning of 2025, the cash buffer was Rs. 750 billion, by the end of the year the cash buffer was also at Rs. 750 billion. To maintain this, we took this decision to balance it by borrowing,” Seneviratne said, explaining the variation in the cash buffer value.
“The debt servicing amount for every three months is Rs. 1 trillion. On the other end we can say from the borrowing limit, we are supposed to maintain ¼ of it for cash buffers, for every seven months.”
By the end of 2025, Sri Lanka’s gross official reserves were around $6,827 million.
According to Public Debt Management Office Director General Udeni Udugahapattuwa, since its conception in December of 2024, the PDMO had reduced the quantum of T-bills by at least Rs. 1 trillion.
“It has been 14 months since the PDMO has commenced its operations. In domestic debt stock there is Rs. 19.5 trillion, and in external Rs. 11.7 trillion. In T-bills from 2024 December to 2025 December, we have reduced the quantum by around Rs. 1 trillion.”
“In T-bill bonds, the debt stock we have is Rs. 15.6 trillion, of which the cost is around 13%. In T-bills it is around Rs. 3.1 trillion, of which the cost is 8.14%. The total debt stock is Rs. 31 trillion, of which the total cost is 8.73%,” she added.