Reply to thread

Message: <blockquote data-quote="priyade" data-source="post: 26814467" data-attributes="member: 565365">Tuesday August 24, 2021 6:55 pm                                                                                  ECONOMYNEXT – Sri Lanka’s rupee has fallen to as much as 221 to the US dollars in the importer market for large transactions, market participants said, with banks scrambling to find dollar give to importers who come with printed rupees seeking convertibility.In the official market there is no price transparency after the central bank halted interbank spot market with a price control of around 200 to the US dollar, where margins have widened.Though the central bank has been printing money mainly through failed bond auctions and also through its overnight window in a bid to control interest rates it is no longer providing convertibility for the printed money (interventions) for current transactions.Without price transparency in a interbank spot market, the forex market has got dysfunctional leading to high margins.“Dollars are bought at various rates based on the bargaining power of the seller and the willingness of a particular importer to buy,” a financial sector official said.“Sometime the weighted average selling rate is high though some of the dollars have been bought at lower rates. This was not the case in previous currency crises when there was a spot market where the price was seen by everyone.”“Banks used to keep very thin margins and sell in past crises. Private banks used to sell to CPC with a margin counted in cents.”In the past margins widened in volatility but settled down when trading became more orderly.Meanwhile export company accountants and treasury officials who sold at lower rates are also being unfairly blamed for questionable practices by their chief executives and shareholders, financial sector officials said.“The fact is when importers are desperate to clear goods they pay and some exporters get high rates as a result,” a bank official said. “There is no corruption.”The central bank said it was maintaining an ‘official’ exchange rate around 200 to the US dollar but it is no longer providing convertibility for the notes it is printing for current transactions.Larger private banks are publishing rates of 206.50 to buy dollars and 211 to sell, while foreign banks are offering rates of 213 to buy and 221 to sell US dollar to importers.State-run Bank of Ceylon is still publishing rates of 198.5 to 203.00 to the US dollar for small transactions.The bank was earlier saying deals above 7,500 US dollars would be given at market rate, but it has since been lowered to 1,000 US dollars.In the kerb, the rupee hit 232 to the US dollar, before lockdowns stopped the business, those familiar with the market said.Banks are also giving dollar notes for travellers at higher rates.With large volume of money being printed the central bank is running low on reserves.Last week the central bank raised the rate at which money is printed overnight to 6.00 percent from 5.50 percent and a ceiling rate for Treasury bill auctions to 5.93 percent.The failed bill auctions create most of the forex shortages when state workers are paid with the money, or existing bond holders get hold of printed rupees, analysts have said. (Colombo/Aug14/2021) <img src="/styles/default/xenforo/smilies/default/angry.gif"  class="smilie" loading="lazy" alt=":angry:" title="Angry    :angry:" data-shortname=":angry:" />  <img src="/styles/default/xenforo/smilies/default/angry.gif"  class="smilie" loading="lazy" alt=":angry:" title="Angry    :angry:" data-shortname=":angry:" /> <a href="https://economynext.com/sri-lanka-rupee-falls-to-221-to-us-dollar-margins-widen-with-no-price-transparency-85403/" target="_blank">https://economynext.com/sri-lanka-rupee-falls-to-221-to-us-dollar-margins-widen-with-no-price-transparency-85403/</a></blockquote>

Verification: Payakata winadi keeyak tibeda?

Top Bottom