Foreign reserves down US$ 2.2B
Posted on April 15th, 2015
Paneetha Ameresekere Ceylontoday
Ceylon Finance Today: Sri Lanka’s foreign reserves in the 7½ month period from end August 2014 up to Saturday (11 April) has fallen by US$ 2.2 billion (24%) to US$ seven billion, latest Central Bank of Sri Lanka (CBSL) statistics showed. The fall in reserves is due to Sri Lanka running a deficit in the current account in its balance of payments with no sizeable inflows in the form of commercial or concessional borrowings or foreign aid coming by, to boost the same. A further US$ 1.1 billion from its foreign reserves are expected to be expended from CBSL’s foreign reserves in the two month period from end April to end May 2015 for the purpose of meeting Government of Sri Lanka’s (GoSL’s) foreign debt servicing commitments,…
which commitments too are met from CBSL’s foreign reserves.
As a result, since end August 2014 to date, the exchange rate (ER) in interbank trading has had depreciated by between Rs 3.30 to Rs 3.35 (2.5%-2.6%) to be currently trading at Rs 133.50/55 level to the US dollar in one week’s forwards in two way quotes, the most popular mode of trading in the market these days due to CBSL’s exercise of moral suasion on banks, revolving round its spot price. The ER as at end August 2014 had closed at around Rs 130.20 to the US dollar or thereabouts in interbank spot trading. At that time (August 2014), the most popular mode of trading in the foreign exchange (FX) market was on ‘spot.’
But now, due to moral suasion, the market is trading on one week’s forwards. CBSL currently is administratively controlling the spot at Rs 132.90 to the US dollar. In a further setback to the ER, the rupee is currently under pressure to depreciate further, due to demand once more picking up, on account of post Avurudu commitments.
April 15th, 2015 at 5:22 pm
Namaste: I read somewhere Indian Empire is going to give bridging finance to shore up the Sri Lankan Rupee of about 1 billion. It was not clear whether it was Indian Rupees or Sri Lankan Rupees. Jai Hind
April 15th, 2015 at 6:51 pm
As predicted, the Sri Lankan economy is in very bad shape and it is worsening. To stop the slide, Sri Lanka is borrowing even more this time from India. Hopefully this impending economic collapse will change voters’ preference at the election; not after. From the point of the Mahinda group, it is best to postpone the General Election as much as possible.
April 15th, 2015 at 8:15 pm
Reserves are dropping, growth is stalling, and the currency is being kept afloat by LOANS from India.
Although economic reporting lags, it may well be the case that Sri Lanka is currently in negative growth territory (RECESSION!), and if the currency were not defended so aggressively with Indian loans, it would be at about 150 to the USD right now.
It doesn’t take a rocket scientist to figure out that this is not sustainable.
April 15th, 2015 at 8:46 pm
Maru Sira and his UNP gang robbed $2.2 billion in just 4 months!!! Araliya foreign investments fund and Chan-Ban-Kum hedge fund of UK.
Patriotic SLs should delay sending money to SL. Patriotic SLs should NOT help Singaporean Arjun Mahendran rob their earnings. Meanwhile SLs living in SL should import more and more gold to further put pressure on these thieves. When the foreign reserves are LOW, these INTERNATIONAL CROOKS have NOTHING to steal!! When army releases land, mostly Tamil expats benefit. They should sell their new lands and take the money abroad (as they did in 2002, 2003).
April 16th, 2015 at 5:57 am
I always had a hunch that MR is a smart guy. But, didn’t know he was this good in managing the country’s finances and development. It is time that the misguided voters realize that Mahinda is not just a name, but a country. “Mahinda Kiyanne Namak Nemei, Ratak (quote from Wimal Weerawansa in Nugegod)”.
The then opposition complained that Nevard Cabraal is a Chartered Accountant and not a banker, now we can see the managing techniques used by an Oxford Graduate.
April 16th, 2015 at 11:42 am
The new illegal govt going according to Plan ?
First bust the country’s economy and next sell off large gobs of it to foreigners – Tamil Ex-pats from UK mostly ? Hey presto ! Eelam on a platter and on auto drive !!
Sale of Land to Foreigners Bill already in place.
April 16th, 2015 at 4:28 pm
ARALIYA FOREIGN INVESTMENTS PVT LTD.
Gem mafia, paddy mafia, rice mafia, sand mafia and now foreign exchange mafia too.
They got the right CENTRAL BANK GOVERNOR and the right CHEAP JUSTICE for the job!! Just like TAMIL ELAM!!
A country gone to shitt. A tsunami, flood or a drought will TOTALLY SINK SL.