Did the USD selling rate drop because of Ranil? Explanation brought to light

Date:

The selling price of the US dollar saw a significant drop today (13).

According to the official daily exchange rate chart of the Central Bank of Sri Lanka (CBSL), the selling price of the US dollar was priced at Rs. 364.98.

There were various assumptions regarding the decrease, among which was that the selling price of the US dollar had reduced due to the appointment of Ranil Wickremesinghe as the Prime Minister.

However, speaking at a media briefing on Monday, CBSL Governor Dr. P. Nandalal Weerasinghe said the Central Bank will intervene to manage the intraday volatility of the exchange rate.

Accordingly, the selling price of the US dollar decreased due to a decision taken by the Monetary Board on the exchange rate of the Sri Lankan Rupee against the US dollar.

In line with the decision, the CBSL has adviced all licensed banks to set the US dollar middle spot exchange rate for interbank transactions and maintain the variation margin of Rs. 2.60 on either side (+/-) of the middle spot exchange rate, with effect from today.

The Central Bank further adviced that rates applicable to other currencies against the Sri Lankan Rupee should also be derived based on the above US dollar exchange rate and variable margin.

In a circular issued yesterday, the CBSL had issued more instructions in this regard.

Licenced banks are requested to apply only reasonable margins in determining the rates applicable for customer transactions. Forward rates of the licenced banks shall also be consistent with the interbank market spot rates.

Further, the fees/commission structure of licenced banks shall be reasonable, transparent and shall not exceed 3% of the equivalent rupee value of the transaction.

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