Spot closes unchanged for fifth day

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The “spot” closed unchanged for the fifty fifth consecutive market day at Rs 360/364 to the US dollar in two way quotes yesterday (19), market sources told Ceylon Today.

Consequently , yesterday, the administered market “spot” was down by between 80-79.31 per cent (Rs 160-161), year on year (YoY); thereby causing cost push inflationary pressure as Sri Lanka is an import dependent economy, they said.

 Meanwhile, yesterday, the value of this official administered “spot” was fixed at Rs 362.90 to the dollar, while a year ago it was fixed at Rs 200, down 81.45 per cent (Rs 162.90), YoY. In related developments,  the straitjacketed, inflexible administered market “spot” a year ago was fixed at Rs 200/203 to the dollar in two way quotes, unchanged for the  eighth consecutive market day to Friday (16).

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, Central Bank and or between the Government and/or Central Bank with the market, which was fixed at Rs 362.90 to the dollar on Friday.

They further said that trades in the administered market “spot” (Rs 360/364) on Friday 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.

 “Spot” trades are settled after two market days from the date of transaction. The Central Bank, the steward of Government debt and of its foreign reserves also deals in “spot.”

By Paneetha Ameresekere