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Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyToday at 12:10 pm by puliyanam

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Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyToday at 11:16 am by nihal123

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Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyYesterday at 8:10 pm by Rana

» Thread for News on CSE and SL Economy
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyYesterday at 3:53 pm by Backstage

» නොතේරෙන කමට කරපු මෝඩ වැඩේ....
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptySun Feb 23, 2020 8:41 pm by Backstage

» රාගම බ්‍රවුන්ස් රෝහල ඉෂාරගෙන් හැරීට. රු. බිලියන 1.6 ක ගනුදෙනුවක්
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyFri Feb 21, 2020 8:53 pm by nihal123

» SAMP.N0000 (Sampath Bank PLC)
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Feb 20, 2020 6:47 pm by NIRMALSG

» Huge transactions expected to boost CSE in near future’
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Feb 20, 2020 12:45 pm by Backstage

» මිනිරන්වලට දසදහස් ගුණයක වටිනාකමක් ගෙන දෙන ඉෂාර නානායක්කාරගේ නවතම මෙහෙයුම
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Feb 20, 2020 9:57 am by nuwanmja

» Happy Birthday
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Feb 20, 2020 9:21 am by nuwanmja

» Thought for the day...
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Feb 20, 2020 12:01 am by sashimaal

» Gota's Era
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyWed Feb 19, 2020 1:04 pm by කිත්සිරි ද සිල්වා

» හොදට තිබුණ රටක්
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyWed Feb 19, 2020 9:46 am by කිත්සිරි ද සිල්වා

» In the Meantime, Within Our Shores !
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyMon Feb 17, 2020 12:40 pm by කිත්සිරි ද සිල්වා

» How does the stock market work?
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyMon Feb 17, 2020 11:07 am by කිත්සිරි ද සිල්වා

» An ex-businessman, now bankrupt,
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptySun Feb 16, 2020 9:24 pm by Backstage

» Oil, Gold & Silver Prices
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Feb 13, 2020 1:50 pm by කිත්සිරි ද සිල්වා

» ආර්ථික වර්ධන වේගය – දකුණු ආසියාවේ රටවල් 8කින් ශ්‍රී ලංකාව 6 වැනි තැනට
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyWed Feb 12, 2020 11:47 pm by nihal123

» LOLC Holdings
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyWed Feb 12, 2020 6:19 pm by NIRMALSG

» චීනය කොරෝනා මරණ සංඛ්‍යාව ගැන සැබෑ තතු සඟවන බවට තොරතුරු හෙළිවේ
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Feb 06, 2020 8:33 pm by nihal123

» VPEL.N0000 (Vallibel Power Erathna PLC)
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Feb 06, 2020 11:29 am by කිත්සිරි ද සිල්වා

» Obituary Notice.
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Feb 06, 2020 10:47 am by කිත්සිරි ද සිල්වා

» IOC පිරවුම්හල් හිමියන් පාරට බසී. මිල සමාන කරන්නැයි ඉල්ලයි
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Feb 06, 2020 10:37 am by කිත්සිරි ද සිල්වා

» කොරෝනා වෛරසය හමුවේ ලෝක වෙළෙඳපොළේ තෙල් මිල සීඝ්‍රයෙන් පහළට
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyWed Feb 05, 2020 11:15 am by nihal123

» 2013 දී ශ්‍රී ලංකන් ගුවන් සේවයේ ඉහළ නිලධාරී බිරිඳකට ඩොලර් මිලියන 2ක අල්ලසක්
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyTue Feb 04, 2020 12:53 pm by කිත්සිරි ද සිල්වා

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Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyMon Feb 03, 2020 11:16 pm by nihal123

» චීනයේ හුනාන් පළාතේ තවත් වයිරසයක් පැතිරයන බවට අනතුරු ඇඟවීමක්
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyMon Feb 03, 2020 9:15 pm by serene

» ද ෆිනෑන්ස්, අර්ථසාධක අරමුදලේ රු. මිලියන 205 ක් ගිලියි
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyMon Feb 03, 2020 12:29 pm by nihal123

» COMB.N0000 (Commercial Bank of Ceylon PLC)
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptySat Feb 01, 2020 6:16 am by serene

» BPPL Holdings Limited
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyFri Jan 31, 2020 8:41 pm by pathfinder

» මූල්‍ය සමාගම්වලින් භාගයක්ම දුවන්නේ අමාරුවෙන්
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyFri Jan 31, 2020 8:08 pm by nihal123

» EPF ආයෝජනයට සූදානම්
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Jan 30, 2020 10:13 pm by nihal123

» Man’ who gave birth in Matara hospital says he doesn’t want his baby
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Jan 30, 2020 6:57 pm by Backstage

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Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Jan 30, 2020 10:54 am by nihal123

» Sri Lanka’s EPF bought shares with no approval, no analysis
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Jan 30, 2020 9:35 am by nihal123

» කොරෝනා නිසා ගෝලීය සමාගම් රැසකට බිලියන ගණනක් පාඩුයි
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyWed Jan 29, 2020 10:33 pm by nihal123

» කොටස් වෙළෙඳපොළ සක්‍රීය වෙයි. දෛනික පිරිවැටුම රු. බිලියනය ඉක්මවයි. සියලු කොටස් ඒකක 51කින් ඉහළට
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyWed Jan 29, 2020 10:20 pm by nihal123

» කොරොනා වෛරසයෙන් කොටස් වෙළෙඳපොළට දැඩි බලපෑම්
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyTue Jan 28, 2020 2:39 pm by lanka

» LIOC.N0000 (Lanka IOC PLC)
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyMon Jan 27, 2020 9:48 am by LSE

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Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyFri Jan 24, 2020 7:05 am by nihal123

» අසාදුගත ව්‍යාපාරිකයින්ට රජයෙන් දුන් සහනය මෙන්න
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» සුරැකුම්පත් කොමිසමට නව සභාපතිවරයෙක්
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyWed Jan 22, 2020 10:20 am by lanka

» කොටස් තැරැව්කරුවෝ අගමැති මහින්ද හමුවෙති
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» SEYB.N0000 (Seylan Bank PLC)
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptySun Jan 12, 2020 10:06 pm by subash

» ශ්‍රී ලංකා කොටස් වෙළෙඳපොළ ඉතිහාසයේ දෙවැනි විශාලතම කොටස් ගනුදෙනුව අද
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Jan 09, 2020 9:59 pm by nihal123

» Hayleys MGT
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Jan 09, 2020 5:40 pm by subash

» Browns Investments update
Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyThu Jan 09, 2020 10:42 am by The Invisible

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Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyWed Jan 08, 2020 10:48 pm by The Invisible

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Sri Lanka interest rates should go down, currency will not fall: Mark Mobius EmptyWed Jan 08, 2020 10:44 pm by The Invisible

» RCL - Royal Ceramics
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Sri Lanka interest rates should go down, currency will not fall: Mark Mobius

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Sri Lanka interest rates should go down, currency will not fall: Mark Mobius Empty Sri Lanka interest rates should go down, currency will not fall: Mark Mobius

Post by The Invisible on Wed Dec 11, 2019 11:18 am


ECONOMYNEXT – Sri Lanka’s interest rates should go down, but the rupee will not fall, because the strength of the currency is based on confidence, not just rates, Mark Mobius, an emerging market investor said in a prediction.

“You have to reduce the interest rates,” Mobius, known as a emerging market guru, said at a forum in Colombo organized by Cinnamon Life, an 800 million US dollar real estate development promoted by Sri Lanka’s John Keells Holdings.

“You have to look at the global situation. Interest rates are moving down and are low.”

Prediction

He said some people said that if rates are lowered the currency will fall.

“No, the currency is based on confidence not only on interest rates,” he said. “Look at the US.”

The US however no longer has pegged exchange and is a free floating currency and the Fed does not inject base money (or withdraw) on interventions in the foreign exchange market.

The US dollar also collapsed in 1971 when the Fed injected money while trying to maintain a gold peg at 35 dollars an ounce.

Mobius’ comments came a day after Paul Volcker, the Fed Chairman who ended the stagflation created by the Fed after the gold peg collapsed, died. Volker raised policy rates to 20 percent to end 14 percent inflation, sending oil and gold prices crashing down.

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Sri Lanka can resume high growth path, cut more taxes: Mark Mobius



Sri Lanka invites more investments, tourists from China



John Keells Holdings drags down Sri Lanka stocks



Sri Lanka tourist arrivals to recover by end of winter season: CB Deputy Governor



Sri Lanka bad loans expected to fall after tax cuts: HNB














Paul Volcker, the man who tamed the Fed, dies at 92

Currency crises are faced by soft-pegs, which collect foreign reserves by intervening in forex markets, not free floating regimes.

Currency boards or hard pegs (where short term rates float) also do not face currency crises and ‘foreign exchange shortages’.

No Forex Reserves

However in an about turn, Mobius himself admitted that he looked at forex reserves when investing in emerging markets.

Central banks of countries like the US did not have foreign reserves and most gold and forex reserves were owned by emerging market countries, he said.

He said at one time he could not exit from Nigeria. Nigeria is an oil producing country with a bad central bank.

Mobius said he was told that there were no foreign exchange reserves and he was told to wait and he had to wait.

The Nigerian currency the Naira was set up with a central bank in 1972, replacing the pound at 0.6 to the US and it has fallen to about 360 so far.

The soft-peg with the US dollar operated by Sri Lanka’s central bank has the worst record among South Asian monetary authorities, falling from 4.70 to 182 since it was created in 1952.

The central bank’s soft-peg has dragged the country and the Treasury to the IMF 16 times so far.

Pakistan is next the next worst central bank with the rupee falling to 155 from 4.70 to the US dollar. Bangladesh is next, but has kept monetary stability for almost a decade with the Taka at around 80 to the US dollar, giving a stable foundation for a period of strong growth.


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The best performer is the Maldives Monetary Authority, whose dollar peg has fallen to only 15.

Dubai which also had Indian rupees now has a currency which is 3 to the US dollar, and has no independent monetary policy, with a currency-board like system. (Colombo/Dec10/2019 – Update III)
The Invisible
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