The Investor Sentiment - Equity and investments forum for Sri Lankans
Search
 
 

Display results as :
 


Rechercher Advanced Search

Latest topics
» අනං මනං! #/+?.<>
Yesterday at 11:03 pm by Yin-Yang

» Building an automated trading system from scratch
Yesterday at 3:36 pm by xmart

» Sri Lanka cuts taxes on fuel to keep retail prices below formula
Yesterday at 2:55 pm by Ethical Trader

» Sri Lanka's Chemanex Plc, to exit closed export unit
Yesterday at 2:32 pm by Ethical Trader

» Merchandise export made little contribution to Sri Lanka’s growth: World Bank
Yesterday at 2:30 pm by Ethical Trader

» Sri Lanka bond yields edge down, rupee marginally weaker
Yesterday at 2:27 pm by Ethical Trader

» Sri Lanka could consider capital controls for rupee slide: economist
Yesterday at 2:24 pm by Ethical Trader

» ඩොක්යාර්ඩ් සමාගමට ඩොලර් මිලියන 3.12ක කොන්ත්‍රාත්තුවක්
Fri Oct 19, 2018 10:30 pm by The Invisible

» Sri Lanka President drops assassination bombshell, accuses India
Fri Oct 19, 2018 9:48 am by Brave Heart

» Sri Lanka stocks end flat, rupee marginally weaker
Fri Oct 19, 2018 9:38 am by Brave Heart

» Sri Lanka's Cargills Bank gets BB(lka) credit rating: Fitch
Fri Oct 19, 2018 7:48 am by The Invisible

» NDB.N0000 (NATIONAL DEVELOPMENT BANK PLC)
Thu Oct 18, 2018 10:26 pm by PANTOMATH

» PB. N0000 (People's Bank)
Thu Oct 18, 2018 6:01 pm by Ethical Trader

» BOC.N0000 ( Bank of Ceylon)
Thu Oct 18, 2018 5:52 pm by Ethical Trader

» රුපියලේ ඉරණම
Thu Oct 18, 2018 5:50 pm by Ethical Trader

» Sri Lanka gets US$1bn eight-year loan from China Development Bank
Thu Oct 18, 2018 8:06 am by serene

» Sri Lanka 3-month Treasuries yield up 20bp at auction
Thu Oct 18, 2018 7:48 am by The Invisible

» Sri Lanka seeks joint venture with Indian Oil unit for Trinco oil tanks
Thu Oct 18, 2018 7:46 am by The Invisible

» Sri Lanka stocks down 0.33-pct, rupee steady
Thu Oct 18, 2018 7:45 am by The Invisible

» Global stocks mostly fall as Fed signals more US rate hikes ahead
Thu Oct 18, 2018 7:44 am by The Invisible

» SAMP.N0000 (SAMPATH BANK PLC)
Thu Oct 18, 2018 7:39 am by The Invisible

» Plantation sector updates
Wed Oct 17, 2018 5:22 pm by කිත්සිරි ද සිල්වා

» Fed Rate hike , Rs Devaluation PART 2 : Should CSE be like this? Whose FAULT is it?
Wed Oct 17, 2018 3:14 pm by Yin-Yang

» Banking Sector
Wed Oct 17, 2018 11:17 am by lanka

» Sri Lanka needs prudent fiscal policy to retain confidence, refinance debt: Economist
Wed Oct 17, 2018 9:51 am by The Invisible

» EPF needs governance overhaul, proxy advisor, to invest in Sri Lanka stock market
Wed Oct 17, 2018 9:49 am by The Invisible

» 17-pct of Sri Lankans stunted: World Bank Human Capital Index
Wed Oct 17, 2018 9:45 am by The Invisible

» Coalition politics hurt Sri Lanka liberalization drive: Harsha
Wed Oct 17, 2018 9:44 am by The Invisible

» Sri Lanka President calls to expand Nixon shock as rupee falls
Wed Oct 17, 2018 9:43 am by The Invisible

» Sri Lanka new car registrations down 40-pct in September
Wed Oct 17, 2018 9:39 am by The Invisible

» Sri Lanka stocks up 0.37-pct, rupee ends marginally lower
Wed Oct 17, 2018 9:38 am by The Invisible

» Sri Lanka’s Nations Trust Bank gets US$50mn from Dutch lender
Wed Oct 17, 2018 7:58 am by serene

» JKH shares trade Rs1.1bn worth at 126-127/share in today’s trades
Tue Oct 16, 2018 8:45 pm by PANTOMATH

» Only 8-pct of Sri Lanka’s 2018 budget promises progressing on track: Verité
Tue Oct 16, 2018 7:14 pm by serene

» වෙළෙඳපොළ වැටුණු මොහොතේ නිමල් රු. බිලියන 2 ක කොටස් අරන්
Tue Oct 16, 2018 11:35 am by Ethical Trader

» බැඳුම්කර මගඩියෙන් අර්ථසාධක අරමුදලට වූ පාඩු පියවා ගන්න මහ බැංකුව සිවිල් නඩුකර පවරයි
Tue Oct 16, 2018 11:32 am by Ethical Trader

» සිංගර් කොටස් ගනුදෙනුවෙන් පසු ශුද්ධ විදේශීය ගලායාම රු. බිලියන 8 ඉක්මවයි
Tue Oct 16, 2018 11:23 am by Ethical Trader

» Hayleys buys balance 9.47-stake in Singer Sri Lanka
Tue Oct 16, 2018 8:24 am by yellow knife

» Sri Lanka's All Share index falls below 5,800 points
Tue Oct 16, 2018 7:50 am by serene

» Sri Lanka stocks end 0.70-pct lower, rupee lose some gains
Tue Oct 16, 2018 7:33 am by The Invisible

» Sri Lanka gilt yield curve flattens amid currency pressure
Tue Oct 16, 2018 7:30 am by The Invisible

» Global stocks mixed as oil gains amid scrutiny of Saudi Arabia
Tue Oct 16, 2018 7:24 am by The Invisible

» චීන සංවර්ධන බැංකුවේ සරණින් රුපියල අළු ගසා නැගිටියි
Mon Oct 15, 2018 6:11 pm by serene

» Will take care of debt issues of Belt and Road projects: China
Mon Oct 15, 2018 6:07 pm by serene

» සිංගර් ඉතුරු කොටස ධම්මික අද මිල දී ගනී
Mon Oct 15, 2018 4:57 pm by The Invisible

» ලංකා හා මහජන බැංකු කොටස් අලෙවියක්
Mon Oct 15, 2018 12:23 pm by nihal123

» රුපියල ශක්තිමත් කිරීමට අතේ ඇති ඩොලර් විසි කිරීමේ අවාසිය
Mon Oct 15, 2018 9:32 am by The Invisible

» Global stocks stumble as Trump attacks Fed
Mon Oct 15, 2018 9:29 am by The Invisible

» අහිමි වෙන ඉරාන තේ වෙළෙඳපොළ වෙනුවට රජය විකල්ප සොයාගෙන නෑ
Mon Oct 15, 2018 9:28 am by The Invisible

» Sri Lanka apparel exports up 7.8-pct in Aug despite Brexit hit
Mon Oct 15, 2018 9:25 am by The Invisible

October 2018
SunMonTueWedThuFriSat
 123456
78910111213
14151617181920
21222324252627
28293031   

Calendar Calendar

Disclaimer


Information posted in this forum are entirely of the respective members' personal views. The views posted on this open online forum of contributors do not constitute a recommendation buy or sell. The site nor the connected parties will be responsible for the posts posted on the forum and will take best possible action to remove any unlawful or inappropriate posts.
All rights to articles of value authored by members posted on the forum belong to the respective authors. Re-using without the consent of the authors is prohibited. Due credit with links to original source should be given when quoting content from the forum.
This is an educational portal and not one that gives recommendations. Please obtain investment advises from a Registered Investment Advisor through a stock broker

Sri Lanka forex reserves down US$1.4bn to US$7.18bn in Sept

Go down

Sri Lanka forex reserves down US$1.4bn to US$7.18bn in Sept

Post by The Invisible on Thu Oct 11, 2018 8:06 am


ECONOMYNEXT - Sri Lanka's forex reserves have fallen by 1.4 billion US dollars to 7,180 million dollars by end September 2018, from 8,584.54 billion rupees in August, amid maturing hedging deals and debt repayments and interventions, official data show.

Sri Lanka's central bank had made interventions of 731 million dollars in 2018 Deputy Governor Nandalal Weerasinghe said on October 02 and purchases of 551 million dollars, which seems to indicate net interventions of at least 644 million dollars in September.

Based on changes of liquidity in money markets, which shifted from an excess aggregate balance of 33.14 billion rupees on August 31, to a short of about 128 billion rupees on September 29 close to about a billion US dollars may have been supplied to the market through swaps and interventions during the period.

About 379 million dollars of hedging deals where the central bank had supplied forward cover in 2013 to state run National Savings Bank matured on September 19, leading to steep liquidity shortages on top of interventions.

Liquidity shortages crop up when a central bank sells dollars in the market, pushing rates up and automatically protecting the exchange rate.

However a soft-pegged central bank, unlike a hard-pegged entity, will then print money to stop interest rates from going up, generating further currency pressure and reserve losses in a vicious cycle, when the new money is loaned by banks.

The Central Bank has only grudgingly allowed rates to go towards the policy ceiling of 8.50 percent.

The central bank injected 14 day money at rates as low as 8.25 percent on Friday after buying bills outright also at below market rates earlier in the week.

But it maintained an overnight liquidity short without permanently sterilizing the interventions in the last few weeks in more prudent policy.

A law to stop the central bank from printing long term money below the Sri Lanka Interbank Offered Rate to sterilize interventions would to a significant way to halt stop balance of payments crises in the future, analysts say.

Sri Lanka's monetary instability began in February when the a series of term repo auctions failed, after the central bank ran out of Treasury bills to mop up inflows.

Analysts who had seen similar problems in earlier crises, and urged central bank in December 2018 to start issuing their own securities to at longer term to mop up liquidity and build up reserves. (Sri Lanka's Central Bank should sell own securities in new credit cycle: Bellwether)


In March and April around the time of a so-called 'buffer' strategy to repay bonds, large liquidity injections were made, rates were cut and the rupee was allowed to slide with excess liquidity generating the first run on the rupee.

There had alrady been warning that printing money to pay domestic debt would result in foreign exchange shortages and sovereign debt default. (Sri Lanka's Weimar Republic factor is inviting dollar sovereign default: Bellwether)

In August there was another massive unsterilized liquidity spike, again the rupee was allowed to slide with excess liquidity. In that liquidity spike and run that came in its wake, short term foreing exchange swaps, of the style used by international speculators to hit at central banks had also been used to generate rupees and push up excess liquidity.

The rupee has so far fallen to 170 to the US dollar. The central bank is also targeting a real effective exchange rate index. A REER peg involves importing the monetary policy of the worst central banks in the region, critics say.

The central bank has since made the finance ministry slap import controls, undermining the credibility of the administration and its core free trade agenda. Analysts had warned earlier that the central bank had to be restrained for free trade to succeed. (Sri Lanka central bank has to be restrained for free trade to succeed: Bellwether)

The money printing central bank set up in 1950 led to progressive exchange and trade controls, and helped economic nationalists and import substitution artists to ask for protection. (Colombo/Oct06/2018)

https://economynext.com/Sri_Lanka_forex_reserves_down_US$1.4bn_to_US$7.18bn_in_Sept-3-12128-1.html
avatar
The Invisible

Posts : 437
Join date : 2016-11-28
Age : 39

Back to top Go down

Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum