‘Spot’ sharply weakens
By Paneetha Ameresekere
The benchmark ‘spot’ sharply weakened by between 40 and 55 cents to be trading at Rs184.80/185.00 to the US dollar in two-way quotes at 4 p.m. yesterday due to demand, market sources told this reporter.
In the calendar year to 4 p.m. yesterday, the ‘spot’ has depreciated by between Rs 3.50-3.60 (1.93-1.98 per cent) in two-way quotes.
Meanwhile, Central Bank of Sri Lanka (CBSL) after a lapse of four weeks successfully sold the full complement of Rs 40 billion risk-free, low cost Treasury (T) Bills on offer at yesterday’s weekly auction.
The WAYs fetched were 4.59 per cent, 4.71 per cent and 4.99 per cent for the 91, 182 and 364 day tenures respectively at yesterday’s auction.
Complementing these developments, Government of Sri Lanka’s (GoSL’s) money printing borrowing costs (MPBCs) decreased by 0.96 per cent (Rs 131.41million) to Rs 13,538.58 million yesterday, aided by GoSL’s face value (FV) MP debt decreasing by Rs 7,000 million (1.35per cent) to Rs 511,634.87 million, partially mitigating demand pull inflationary pressure.
GoSL’s FVMP debt continues to be stuck in the record Rs half-a-trillion plus territory for the sixth consecutive market day to yesterday, due to a continued lack of GoSL revenue.
Market liquidity increased by Rs 7,319 million during yesterday’s trading because of the settlement/s of GoSL’s sales of dollars to CBSL and/or CBSL swapping rupees for dollars from the market, followed by exporter conversions. Conversions are based on the middle rate of the benchmark ‘spot’ as at 4 p.m. on Monday which was Rs 184.25 to the dollar. Transactions between the GoSL and CBSL are foreign reserves neutral.
Consequently, market’s net excess liquidity increased by 0.25 per cent (Rs 319 million) to Rs 129,535 million yesterday.