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Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyToday at 2:20 pm by nuwanmja

» Gota's Era
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyToday at 11:54 am by yellow knife

» Dividend Announcements
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyToday at 11:25 am by Rana

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Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyToday at 9:48 am by LSE

» බැඳුම්කර වංචාවේ වෝහාරික විගණන වාර්තාව පාර්ලිමේන්තුවට
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyFri Jan 24, 2020 7:05 am by nihal123

» අසාදුගත ව්‍යාපාරිකයින්ට රජයෙන් දුන් සහනය මෙන්න
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyFri Jan 24, 2020 6:37 am by nihal123

» SAMP.N0000 (Sampath Bank PLC)
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyThu Jan 23, 2020 5:55 pm by NIRMALSG

» සුරැකුම්පත් කොමිසමට නව සභාපතිවරයෙක්
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyWed Jan 22, 2020 10:20 am by lanka

» In the Meantime, Within Our Shores !
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyTue Jan 21, 2020 10:17 am by කිත්සිරි ද සිල්වා

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Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyMon Jan 20, 2020 9:29 pm by nihal123

» Obituary Notice.
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyTue Jan 14, 2020 4:14 pm by ipo

» LOLC Holdings
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyMon Jan 13, 2020 6:04 pm by smallville

» SEYB.N0000 (Seylan Bank PLC)
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptySun Jan 12, 2020 10:06 pm by subash

» Happy Birthday
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptySun Jan 12, 2020 9:16 pm by lanka

» ශ්‍රී ලංකා කොටස් වෙළෙඳපොළ ඉතිහාසයේ දෙවැනි විශාලතම කොටස් ගනුදෙනුව අද
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyThu Jan 09, 2020 9:59 pm by nihal123

» Hayleys MGT
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyThu Jan 09, 2020 5:40 pm by subash

» Browns Investments update
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyThu Jan 09, 2020 10:42 am by The Invisible

» Tokyo Cement
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyWed Jan 08, 2020 10:48 pm by The Invisible

» Lanka Tiles
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyWed Jan 08, 2020 10:44 pm by The Invisible

» RCL - Royal Ceramics
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyWed Jan 08, 2020 10:39 pm by The Invisible

» AEL Access Engineering
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» Sri Lanka central bank to develop a cost-based rate to price loans
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» Dialog Finance
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyWed Jan 08, 2020 10:19 pm by The Invisible

» Tourism Sector
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyTue Jan 07, 2020 2:05 pm by nihal123

» Expolanka
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyTue Jan 07, 2020 1:18 am by Afourer

» Cartoon Today
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyMon Jan 06, 2020 2:41 pm by කිත්සිරි ද සිල්වා

» කොළඹ කොටස් හුවමාරුවෙහි නවතම ජංගම දුරකථන යෙදුම
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptySat Jan 04, 2020 7:36 pm by spw19721

» ඉරානයට කළ ප්‍රහාරයෙන් පසු යුරෝපයේ කොටස් වෙළඳපොළ රැසක් පහළ වැටෙයි
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptySat Jan 04, 2020 1:30 pm by nihal123

» VAT අදාළ නැති කට්ටිය මෙන්න. 50,000 ක ලැයිස්තුවක්
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyFri Jan 03, 2020 11:55 am by nihal123

» How to get Access to: 104 Technical trading experiments by HUNTER
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyThu Jan 02, 2020 9:20 am by Admin

» ලංකාවේ ලොකුම සමාගම මෙන්න. දුම්කොළ සමාගම අභිබවමින් ජෝන් කීල්ස් යළිත් පෙරමුණට
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» Sri Lanka’s LOLC Prepares to Sell Its Biggest Overseas Unit
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» Sri Lanka’s Cargills, Sampath, DFCC Bank says met lending rate ceilings
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyWed Jan 01, 2020 4:26 pm by NIRMALSG

» Sri Lanka bank bad loans spike to 4.9-pct, non-banks 9.7-pct in Sept
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» People’s Bank, Sampath, and DFCC face penalties
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» NDB.N0000 (National Development Bank PLC)
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» Thought for the day...
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» ඩොක්ටර් ඒලියන්ත වයිට්
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyThu Dec 26, 2019 9:15 am by කිත්සිරි ද සිල්වා

» Why (Happy) People Cheat?
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» 65 Ways to Make Money Online
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» සුළු හා මධ්‍ය පරිමාණ ව්‍යාපාරිකයින් ලබාගත් ණය අයකර ගැනීම අත්හිටුවන්න
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» ACL Cables
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» Sri Lanka to up employer EPF contribution to 15-pct, start social security fund
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyWed Dec 18, 2019 2:46 pm by The Invisible

» රාජ්‍ය සමාගම් කොටස් වෙළෙඳපොළට ගෙන ආ යුතුයි
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» Sri Lanka can resume high growth path, cut more taxes: Mark Mobius
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» රතු වැටෙනකොට
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyWed Dec 11, 2019 2:59 pm by කිත්සිරි ද සිල්වා

» Sri Lanka interest rates should go down, currency will not fall: Mark Mobius
Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor EmptyWed Dec 11, 2019 11:18 am by The Invisible

» Equation of Happiness Solved
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Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor

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Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor Empty Sri Lanka rupee slightly undervalued, REER index below 100: CB Governor

Post by The Invisible on Sat Oct 27, 2018 6:49 am

ECONMYNEXT - Sri Lanka's rupee is now below 100 on a real effective exchange rate index after recent depreciation, Central Bank Governor Indrajit Coomaraswamy said.

"The REER is now a shade under 100," Governor Coomaraswamy told a business forum organized by Asia Securities, a Colombo-based equities brokerage, earlier this week.

"It helps exporters, and helps import substitution industries."

A falling currency mainly helps exporters by cutting real wages as salaries take time to catch up, providing a subsidy at the expense of the working class, pushing up profits of businessmen and helping them avoid innovation and capital investment that would have forced them boost labour productivity, analysts say.

Prices will move up first in exported and imported (traded) products, with raw material prices also moving up.

The profits real salary cut will remain until wages catch up and prices in non-traded sectors move up.

In countries like Sri Lanka the lack of market pricing on energy and utilities like water also gives exporters an additional subsidy at the expense of energy retailers or taxes of the state, when the currency falls.

In countries where the currency depreciates every year, there may be a residual advantage as wages may not catch up exactly with currency depreciation which will eventually lead to labour unrest and riots, especially after prices move up in non-traded areas as well, but wages do not catch up.

Coomaraswamy said the pass-through from recent depreciation on domestic prices was less than expected.

Harvests were coming in which was keeping prices competitive.

Analysts say the falling Indian rupee, produced by the Reserve Bank of India, one of the worst central banks in the region, is also helping keep some prices stable. (Colombo/Oct23/2018)
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