Reserves down $323.61M
By Paneetha Ameresekere
‘Spot next’ and up to one month’s forwards, the most popular foreign exchange (FX) instruments in the market these days due to controls on the benchmark ‘spot,’ led by import bans, exchange controls and high import taxes, held, to be trading unchanged at Rs 197/198 to the US dollar in two way quotes at 4pm yesterday, market sources told Ceylon FT.
However, year-on-year (YoY) to 4 p.m. yesterday the exchange rate (ER) has sharply fallen by between Rs 15.60-16.50 (8.60-9.09 per cent).
Meanwhile, the persistent spread of 100 cents between the ‘buy’ and ‘sell’ quotes of the ER in the FX market is a reflection of the uncertainty pervading the market currently, sources said.
In like gloom and doom developments, the country’s foreign reserves bled for the fourth consecutive market day to yesterday, this time by US$ 34.44 million (Rs 6,670 million) and in the four consecutive market days to yesterday by US$323.61 million (Rs 62,608 million).
Haemorrhaging of the country’s foreign reserves have to be looked at in the context that reserves are already at a 44-month low at US$5.7 billion as at last month end (December 2020), according to latest data.
The government’s money printing borrowing costs (MPBCs) sharply fell for the thirteenth consecutive market day to yesterday, this time steeply, by 0.63 per cent (Rs 87.91 million) to Rs 13,972.76 million, driven by persistent insecurity. This fall has to be looked at in the context that GoSL’s face value (FV) MP debt remained unchanged at Rs 731,246.88 million for the third consecutive market day to yesterday, a case for MPBCs too to remain unchanged under perfect conditions.
Meanwhile, GoSL’s FVMP debt has been above Rs 0.5 trillion for a record 55 consecutive market days in its second dispensation to yesterday due to a lack of GoSL revenue. Consequently net excess liquidity sharply declined by four per cent to Rs 166,787 million yesterday due to the aforesaid external commitments.