Central Bank of Sri Lanka’s (CBSL’s) administered, benchmark ‘spot’ weakened sharply by Rs 6.19 (1.73 per cent) to Rs 364.76 to the US dollar due to sustained political uncertainty, official data showed yesterday. On the previous day Friday 6 May, the administered ‘spot’ had closed stronger at Rs 358.57 to the dollar.
Year on year to yesterday the administered ‘spot’ has weakened steeply by 82.82 per cent (Rs 165.24) to Rs 364.76, official statistics further showed. A weak ‘spot’ causes cost-push inflation as Sri Lanka is an import dependent economy. A year ago on Friday 7 May 2021, CBSL’s administered ‘spot’ was stronger at Rs 199.52 to the dollar.
‘Spot’ trades are settled after two market days from the date of transaction. CBSL, the steward of Government of Sri Lanka’s (GoSL’s) debt and of its foreign reserves, deals in ‘spot’. The banking regulator is also CBSL. The ‘spot’ is administered by CBSL to show GoSL’s foreign debt in rupee terms to be of a lower value for accounting purposes, it’s learnt.
By Paneetha Ameresekere