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

Display results as :
 


Rechercher Advanced Search

Latest topics
» Thread for News on CSE and SL Economy
Yesterday at 8:44 pm by ruwan326

» Dividend Announcement
Yesterday at 7:20 pm by nihal123

» මූර්ත පොළියෙන් ශ්‍රී ලංකාව අංක 1ට – බ්ලූම්බර්ග් අනාවරණය කරයි
Yesterday at 7:18 pm by nihal123

» Obituary Notice.
Yesterday at 7:14 am by කිත්සිරි ද සිල්වා

» Trading Journal
Sun Jan 20, 2019 5:53 am by serene

» LDEV - Lankem Developments
Fri Jan 18, 2019 2:11 pm by ruwan326

» AMF.N0000
Fri Jan 18, 2019 8:34 am by serene

» අනං මනං! #/+?.<>
Fri Jan 18, 2019 5:04 am by Ethical Trader

» REXP.N0000 ( RICHARD PIERIS EXPORTS PLC)
Fri Jan 18, 2019 1:14 am by serene

» MTD WALKERS - KAPI
Thu Jan 17, 2019 6:50 pm by dhanurrox

» විශිෂ්ඨ සිල්ලර වෙළෙන්දෙකුගේ ජීවිත කතාව
Thu Jan 17, 2019 12:15 pm by Ethical Trader

» Flying is the Safest mode of Transport
Thu Jan 17, 2019 6:37 am by කිත්සිරි ද සිල්වා

» AAIC.N0000
Wed Jan 16, 2019 9:50 pm by serene

» இனிய பொங்கல்
Tue Jan 15, 2019 9:15 pm by nihal123

» DIPD.N0000 (Dipped Products)
Tue Jan 15, 2019 8:18 pm by PANTOMATH

» HUNA.N0000
Mon Jan 14, 2019 5:29 pm by Ethical Trader

» Blessing in Disguise!! It's high time Brothers!!
Sun Jan 13, 2019 11:35 am by serene

» Thread for News on Local and Foreign Politics
Sat Jan 12, 2019 8:26 am by ruwan326

» LLUB.N0000 (CHEVRON LUBRICANTS LANKA PLC)
Thu Jan 10, 2019 8:45 pm by PANTOMATH

» කෝටි 4620 ක බැඳුම්කර නීතියට පිටින් ශ‍්‍රී ලංකන්ට දීලා
Mon Jan 07, 2019 6:18 pm by Ethical Trader

» JINS.N0000 ( Janashakthi Insurance PLC)
Sun Jan 06, 2019 1:12 pm by smallville

» Thread for News on International Markets
Fri Jan 04, 2019 9:40 am by The Invisible

» අවුරුද්ද අප කයි - අපි අවුරද්ද කමු (ජනවාරි පළමුවැනිදා)
Tue Jan 01, 2019 6:23 pm by malanp

» සැන්ඩි එපා!
Tue Jan 01, 2019 6:01 pm by serene

» අසිරිමත් සුබ නව වසරකට ආසිරි !
Tue Jan 01, 2019 5:08 pm by PANTOMATH

» SHL.N0000 (Softlogic Holdings PLC)
Mon Dec 31, 2018 6:04 pm by EBHRAHIMCANADA

»  වසරක කාලය තුළ ඉන්දියාවේ ඉහළම ආදායම් ලාභීන්
Mon Dec 31, 2018 2:47 am by nihal123

» අයදුමේ දී ඡායාරූප ‘ඇලවීම‘ අවශ්‍ය නැති ජාතික හැඳුනුම්පත ජනවාරි 01 සිට දිවයිනටම
Sun Dec 30, 2018 9:37 pm by lanka

» මැදපෙරදිගට පමණක්‘ පාස්පෝට් මින් ඉදිරියට නැහැ
Thu Dec 27, 2018 5:18 pm by Ethical Trader

» BFN - Orient Finance
Wed Dec 26, 2018 6:53 pm by serene

» Wishing Everyone a Happy Christmas !
Wed Dec 26, 2018 7:27 am by spw19721

» Happy Birthday
Tue Dec 25, 2018 11:13 am by sashimaal

» COMB.N0000 ( COMMERCIAL BANK OF CEYLON PLC )
Fri Dec 21, 2018 9:41 am by The Invisible

» In the Meantime, Within Our Shores !
Thu Dec 20, 2018 9:44 am by කිත්සිරි ද සිල්වා

» Buy International English Language Testing System (IELTS) in jordan((WhatsApp:+237675967490))
Mon Dec 17, 2018 10:55 am by nihal123

» AINS - Arpico Insurance
Thu Dec 13, 2018 10:43 am by The Invisible

» CFVF - First Capital
Thu Dec 13, 2018 5:18 am by Ethical Trader

» බඩගිනී
Tue Dec 11, 2018 9:20 am by Ethical Trader

»  Rajgama heroes !
Sun Dec 09, 2018 9:43 am by කිත්සිරි ද සිල්වා

» BOPL.N0000 (Bogawantalawa Tea Estates PLC)
Fri Dec 07, 2018 7:35 am by The Invisible

» Sri Lanka economic slowdown trims company profits, bank earnings grow
Thu Dec 06, 2018 3:04 pm by nihal123

» Better Than Bitcoin
Thu Dec 06, 2018 9:42 am by කිත්සිරි ද සිල්වා

» Hutchison, Etisalat complete mobile networks merger in Sri Lanka
Wed Dec 05, 2018 9:30 am by The Invisible

» Oil prices surge more than 5-pct
Mon Dec 03, 2018 1:53 pm by Ethical Trader

» CCS.N0000 ( Ceylon Cold Stores)
Mon Dec 03, 2018 10:03 am by The Invisible

» HAYC - Haycarb
Sun Dec 02, 2018 3:04 pm by xmart

» LGL Laugfs Gas
Fri Nov 30, 2018 9:43 am by The Invisible

» Oil prices gain as investors eye Fed relief on interest rates
Fri Nov 30, 2018 9:41 am by The Invisible

» ලැයිස්තුගත සමාගම් 8 ක් කොටස් ගනුදෙනු තහනම් වීමේ අවදානමක
Thu Nov 29, 2018 11:34 am by nihal123

» අපි තනිකර ලෝකය දිව යන්නේ
Thu Nov 29, 2018 11:32 am by කිත්සිරි ද සිල්වා

January 2019
SunMonTueWedThuFriSat
  12345
6789101112
13141516171819
20212223242526
2728293031  

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 : 877
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