The guided benchmark market ‘spot’ administered since 13 May closed unchanged at Rs 360/365 to the US dollar in two-way quotes for the 21st consecutive market day to yesterday, synchronizing with last year’s performance, where, then too, the administered, coupled with an inflexible ‘spot’ in operation then, also closed unchanged for the 21st consecutive market day to 16 June 2021 at Rs 199.75/200.25 to the dollar in two way quotes.
Meanwhile, yesterday, the administered market ‘spot’ was down by between 80.23-82.27 per cent (Rs 160.25-164.75) year on year (YoY), thereby causing cost push inflationary pressure as Sri Lanka is an import dependent economy, market sources told ‘Finance Today’.
The band in which the ‘guided market spot’ may currently operate is fixed at +/- three per cent of the officially administered ‘spot’ value, where the latter is applicable for transactions involving the Government of Sri Lanka (GoSL), Central Bank of Sri Lanka (CBSL) and or between the GoSL and/or CBSL with the market, which was fixed at Rs 359.85 to the dollar, unchanged for the second consecutive market day to yesterday.
They further said that trades in the administered market ‘spot’ (Rs 360/365) were mainly restricted to ‘bank-client’ outright trades, while the interbank foreign exchange (FX) market was however dominated by swaps, which were outside the domain of the FX market for this purpose.
YoY as at yesterday, this administered market ‘spot’ has weakened by between 80.23-82.27 per cent (Rs 160.25-164.75), thereby causing cost push inflationary pressure as Sri Lanka is an import dependent economy.
In related developments, the administered ‘spot’ for official purposes, such as for trades involving CBSL, GoSL and/or CBSL, GoSL and the market, YoY to yesterday has depreciated by 80.18 per cent (Rs 160.13).
Yesterday, the value of this official administered ‘spot’ was fixed at Rs 359.85 to the dollar, while a year ago it was Rs 199.72. Meanwhile, the straitjacketed, inflexible administered market ‘spot’ a year ago was fixed Rs 199.75/200.25 to the dollar in two way quotes, the twenty first consecutive market day to 16 June 2021 that it has administratively remained unchanged at those levels, YoY.
By Paneetha Ameresekere