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Sri Lanka Equity Forum » Stock Market Talk » Central Bank will intervene if rupee moves on speculation – official

Central Bank will intervene if rupee moves on speculation – official

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Miss-Sangeetha

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Sri Lanka’s central bank will intervene in the foreign exchange markets if its rupee currency moves for any reasons other than global trends, Nandalal Weerasinghe, the bank’s senior deputy governor, told Reuters on Friday.

Currency dealers have said the central bank had not intervened much to defend the currency, which has dropped 5.6 percent this year, even after it hit record lows for 13 straight sessions through Thursday.

On Thursday, the central bank cut net opening positions (NOP) of commercial banks after the rupee, which had weakened 1.2 percent last month, hit a record low of 162.65 against the dollar. The currency recovered after the central bank’s move.

“If we think it is moving due to several other reasons, rather than a global trend, obviously we will intervene,” Weerasinghe told Reuters in an interview.

“We will intervene and we will bring any other measures we think appropriate.”

On Tuesday, the junior finance minister said the government would leave the level of its rupee to market forces to decide.

Banks have been building up reserves on speculation, however, Weerasinghe said.

“We have observed banks have been building up their positions and not converting (the dollars). Without any fundamental reasons, there is no reason to build up reserves.”

The government has not been “influencing or intervening” in the foreign exchange management of the central bank, he added.

“Whether to intervene or not, it is the responsibility of the central bank,” he said, adding that both depreciation and level of intervention has been lower in Sri Lanka than some other countries.

He also said there was no sharp decline in exporter conversions as claimed by currency dealers and the market had seen an average daily transaction volume of $80 million to $120 million.

Weerasinghe said Sri Lanka’s foreign exposure in the government securities was less than 6 percent of total treasury bonds and bills.

Foreign investors have sold a net 46.9 billion rupees ($289.6 million) worth of securities so far this year, central bank data showed. ($1=161.95 Sri Lankan rupees)

Source: Reuters & Adaderana

ruwan326

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
@Miss-Sangeetha wrote:Sri Lanka’s central bank will intervene in the foreign exchange markets if its rupee currency moves for any reasons other than global trends, Nandalal Weerasinghe, the bank’s senior deputy governor, told Reuters on Friday.

Currency dealers have said the central bank had not intervened much to defend the currency, which has dropped 5.6 percent this year, even after it hit record lows for 13 straight sessions through Thursday.

On Thursday, the central bank cut net opening positions (NOP) of commercial banks after the rupee, which had weakened 1.2 percent last month, hit a record low of 162.65 against the dollar. The currency recovered after the central bank’s move.

“If we think it is moving due to several other reasons, rather than a global trend, obviously we will intervene,” Weerasinghe told Reuters in an interview.

“We will intervene and we will bring any other measures we think appropriate.”

On Tuesday, the junior finance minister said the government would leave the level of its rupee to market forces to decide.

Banks have been building up reserves on speculation, however, Weerasinghe said.

“We have observed banks have been building up their positions and not converting (the dollars). Without any fundamental reasons, there is no reason to build up reserves.”

The government has not been “influencing or intervening” in the foreign exchange management of the central bank, he added.

“Whether to intervene or not, it is the responsibility of the central bank,” he said, adding that both depreciation and level of intervention has been lower in Sri Lanka than some other countries.

He also said there was no sharp decline in exporter conversions as claimed by currency dealers and the market had seen an average daily transaction volume of $80 million to $120 million.

Weerasinghe said Sri Lanka’s foreign exposure in the government securities was less than 6 percent of total treasury bonds and bills.

Foreign investors have sold a net 46.9 billion rupees ($289.6 million) worth of securities so far this year, central bank data showed. ($1=161.95 Sri Lankan rupees)

Source: Reuters & Adaderana
We miss your best friend Teller...........

pererap


Stock Analytic
Stock Analytic
@Miss-Sangeetha wrote:Sri Lanka’s central bank will intervene in the foreign exchange markets if its rupee currency moves for any reasons other than global trends, Nandalal Weerasinghe, the bank’s senior deputy governor, told Reuters on Friday.

Currency dealers have said the central bank had not intervened much to defend the currency, which has dropped 5.6 percent this year, even after it hit record lows for 13 straight sessions through Thursday.

On Thursday, the central bank cut net opening positions (NOP) of commercial banks after the rupee, which had weakened 1.2 percent last month, hit a record low of 162.65 against the dollar. The currency recovered after the central bank’s move.

“If we think it is moving due to several other reasons, rather than a global trend, obviously we will intervene,” Weerasinghe told Reuters in an interview.

“We will intervene and we will bring any other measures we think appropriate.”

On Tuesday, the junior finance minister said the government would leave the level of its rupee to market forces to decide.

Banks have been building up reserves on speculation, however, Weerasinghe said.

“We have observed banks have been building up their positions and not converting (the dollars). Without any fundamental reasons, there is no reason to build up reserves.”

The government has not been “influencing or intervening” in the foreign exchange management of the central bank, he added.

“Whether to intervene or not, it is the responsibility of the central bank,” he said, adding that both depreciation and level of intervention has been lower in Sri Lanka than some other countries.

He also said there was no sharp decline in exporter conversions as claimed by currency dealers and the market had seen an average daily transaction volume of $80 million to $120 million.

Weerasinghe said Sri Lanka’s foreign exposure in the government securities was less than 6 percent of total treasury bonds and bills.

Foreign investors have sold a net 46.9 billion rupees ($289.6 million) worth of securities so far this year, central bank data showed. ($1=161.95 Sri Lankan rupees)

Source: Reuters & Adaderana
 which has dropped 5.6 percent this year, even after it hit record lows for 13 straight sessions through Thursday. So when will they Act ?????

Maharaja


Manager - Equity Analytics
Manager - Equity Analytics
This government has good vision and plans. But they cannot implement any plan.They depend on western countries and funds to live. IMF and ADB are good examples. They offer very low interest loans compared to high interest Chinese loans. This is very good by government because it reduces our debt cost.

Problem with IMF : They put rules and targets. After rules are reached they issue money. One rule is to build foreign reserves. To intervene in forex government will need to sell foreign reserves. Then it will not be able to build up reserves and satisfy the IMF.

Therefore government cannot practically defend the rupee. The central bank jokers say they will defend, but that is to make banks convert the dollar build ups. Bankers are intelligent than c.b jokers so they correctly predict the dollar to rise.

Government defended rupee at 160. That is why for long time it was not rising, otherwise already dollar 170+. 

Reasons dollar will go up ;

1.) Foreigners are selling bonds in a hurry because SL C.bank is famous as a robbery location by its own government. 

2.) US bonds are more attractive so foreigners move money to US.

3.) Government has no control over economic factors (inflation,interest rates,exchange rate etc.)

4.) Government has very less / historic low investments and projects.

5.) Chinese FDIs has reduced a lot. The relationship with world's new Superpower CHINA is very bad. These jokers treated china badly and now we all are paying for it. 

.
.
.
.
.
 
I can continue if needed.



Maharaja expect the dollar to cross 170 level by Sep. end.
Foreign selling will continue in both stock and bond markets.

Even after new government comes to power in 2020 they cannot correct this economic crisis immediately.
New government will need to bring FDIs and investments into country. Thereafter when money comes into country using FDIs automatically economy will turn positive.Companies will show profits. Share market will turn up automatically.

So even Maharaja need to wait till 2020 and see new government's actions to boost economy.
By 2020 dollar can reach 190+ rupees so government need to put politics away and work for the country. 

No politician will help us, they will buy permits and rob the country. They are all corrupt. We have to choose the best of these corrupt politicians who can do some work for the country.



Maharaja

ranferdi

avatar
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@Maharaja wrote:This government has good vision and plans. But they cannot implement any plan.They depend on western countries and funds to live. IMF and ADB are good examples. They offer very low interest loans compared to high interest Chinese loans. This is very good by government because it reduces our debt cost.

Problem with IMF : They put rules and targets. After rules are reached they issue money. One rule is to build foreign reserves. To intervene in forex government will need to sell foreign reserves. Then it will not be able to build up reserves and satisfy the IMF.

Therefore government cannot practically defend the rupee. The central bank jokers say they will defend, but that is to make banks convert the dollar build ups. Bankers are intelligent than c.b jokers so they correctly predict the dollar to rise.

Government defended rupee at 160. That is why for long time it was not rising, otherwise already dollar 170+. 

Reasons dollar will go up ;

1.) Foreigners are selling bonds in a hurry because SL C.bank is famous as a robbery location by its own government. 

2.) US bonds are more attractive so foreigners move money to US.

3.) Government has no control over economic factors (inflation,interest rates,exchange rate etc.)

4.) Government has very less / historic low investments and projects.

5.) Chinese FDIs has reduced a lot. The relationship with world's new Superpower CHINA is very bad. These jokers treated china badly and now we all are paying for it. 

.
.
.
.
.
 
I can continue if needed.



Maharaja expect the dollar to cross 170 level by Sep. end.
Foreign selling will continue in both stock and bond markets.

Even after new government comes to power in 2020 they cannot correct this economic crisis immediately.
New government will need to bring FDIs and investments into country. Thereafter when money comes into country using FDIs automatically economy will turn positive.Companies will show profits. Share market will turn up automatically.

So even Maharaja need to wait till 2020 and see new government's actions to boost economy.
By 2020 dollar can reach 190+ rupees so government need to put politics away and work for the country. 

No politician will help us, they will buy permits and rob the country. They are all corrupt. We have to choose the best of these corrupt politicians who can do some work for the country.



Maharaja

You faill to see the International factor that US Dollar Was raising due to raising treasury yields. 
This is the major factor and you avoided same due to your own political patronage. Most of the Asian currencies have depreciated against dollar and some have depreciate more than SLR.

https://www.thestar.com.my/business/business-news/2018/02/21/most-asian-currencies-weaken-as-rising-yields-boost-dollar/

https://www.marketwatch.com/story/dollar-gains-amid-renewed-trump-tariff-angst-2018-07-11

https://www.marketwatch.com/story/dollar-rebounds-after-3-days-of-losses-as-bulls-hope-for-strong-jobs-report-2018-02-02

http://::::THIS EMAIL DOESNT WORK.. PLEASE CONTACT ME ON FB ACCO

Maharaja


Manager - Equity Analytics
Manager - Equity Analytics
' 2.) US bonds are more attractive so foreigners move money to US. '


pls read properly before shouting






Maharaja

ranferdi

avatar
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@Maharaja wrote:' 2.) US bonds are more attractive so foreigners move money to US. '


pls read properly before shouting






Maharaja

I have read so. But the point is that as a fact all the Asian Currencies have devaluated against USD. Pointing to government and bringing other reasons for political patronage is not fair. I accept that this government is not the best but previous was the worst except war win.

http://::::THIS EMAIL DOESNT WORK.. PLEASE CONTACT ME ON FB ACCO

DS Wijesinghe


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Miss-Sangeetha wrote:Sri Lanka’s central bank will intervene in the foreign exchange markets if its rupee currency moves for any reasons other than global trends, Nandalal Weerasinghe, the bank’s senior deputy governor, told Reuters on Friday.

Foreign investors have sold a net 46.9 billion rupees ($289.6 million) worth of securities so far this year, central bank data showed. ($1=161.95 Sri Lankan rupees)

Source: Reuters & Adaderana

Sri Lanka among EM countries at risk of Exchange-Rate Crisis,says Nomura analysis- Sunday Times

According to analysis by Nomura Holdings, seven emerging economies including Sri Lanka are at risk of an exchange-rate crisis. The other countries include  South Africa, Argentina, Pakistan, Egypt, Turkey and Ukraine
With five of the seven already in a currency crisis or a program run by the International Monetary Fund, that leaves South Africa and Pakistan as the standouts, Bloomberg reported quoting the research.
Nomura is an Asia-headquartered financial services group with an integrated global network spanning over 30 countries. Nomura's research dates back to 1906, when it became the first company in Japan to establish a research department. Today, Nomura has 300 research specialists stationed in 15 regions around the world, covering politics, economics, foreign exchange, interest rates, equities, credit and quantitative strategies.
At the same time, the eight countries with the lowest risk of a crisis are Brazil, Bulgaria, Indonesia, Kazakhstan, Peru, Philippines, Russia and Thailand, according to analysts including Robert Subbaraman, Singapore-based head of emerging-markets economics.
“This is an important result,” they wrote in a note Monday. “As investors focus more on EM risk it is important not to lump all EMs together as one homogeneous group; Damocles highlights a long list of countries with very low risk of full-blown crises.”
Nomura’s findings are based on an early warning model -- called Damocles -- set up to identify exchange rate crises for 30 emerging economies. The model examines a variety of factors including foreign-exchange reserves, debt levels, interest rates and import cover.
It has predicted two-thirds of the 54 developing nation exchange-rate crises since 1996, up to 12 months in advance, according to the analysts.
“The results we have achieved are encouraging, but given the inherent limitations of any early warning system it would be foolish to make any exaggerated claims,” they said.
Damocles refers to the moral parable the Sword of Damocles, an allusion to imminent and ever-present danger 

ruwan326

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
@DS Wijesinghe wrote:
@Miss-Sangeetha wrote:Sri Lanka’s central bank will intervene in the foreign exchange markets if its rupee currency moves for any reasons other than global trends, Nandalal Weerasinghe, the bank’s senior deputy governor, told Reuters on Friday.

Foreign investors have sold a net 46.9 billion rupees ($289.6 million) worth of securities so far this year, central bank data showed. ($1=161.95 Sri Lankan rupees)

Source: Reuters & Adaderana

Sri Lanka among EM countries at risk of Exchange-Rate Crisis,says Nomura analysis- Sunday Times

According to analysis by Nomura Holdings, seven emerging economies including Sri Lanka are at risk of an exchange-rate crisis. The other countries include  South Africa, Argentina, Pakistan, Egypt, Turkey and Ukraine
With five of the seven already in a currency crisis or a program run by the International Monetary Fund, that leaves South Africa and Pakistan as the standouts, Bloomberg reported quoting the research.
Nomura is an Asia-headquartered financial services group with an integrated global network spanning over 30 countries. Nomura's research dates back to 1906, when it became the first company in Japan to establish a research department. Today, Nomura has 300 research specialists stationed in 15 regions around the world, covering politics, economics, foreign exchange, interest rates, equities, credit and quantitative strategies.
At the same time, the eight countries with the lowest risk of a crisis are Brazil, Bulgaria, Indonesia, Kazakhstan, Peru, Philippines, Russia and Thailand, according to analysts including Robert Subbaraman, Singapore-based head of emerging-markets economics.
“This is an important result,” they wrote in a note Monday. “As investors focus more on EM risk it is important not to lump all EMs together as one homogeneous group; Damocles highlights a long list of countries with very low risk of full-blown crises.”
Nomura’s findings are based on an early warning model -- called Damocles -- set up to identify exchange rate crises for 30 emerging economies. The model examines a variety of factors including foreign-exchange reserves, debt levels, interest rates and import cover.
It has predicted two-thirds of the 54 developing nation exchange-rate crises since 1996, up to 12 months in advance, according to the analysts.
“The results we have achieved are encouraging, but given the inherent limitations of any early warning system it would be foolish to make any exaggerated claims,” they said.
Damocles refers to the moral parable the Sword of Damocles, an allusion to imminent and ever-present danger 

This is from Derana not Economy next-    http://bizenglish.adaderana.lk/clarification-on-the-erroneous-report-regarding-sri-lanka-issued-by-nomura-holdings/


Clarification on the Erroneous Report regarding Sri Lanka issued by Nomura Holdings

September, 11, 2018

Several international media sites have quoted a new analysis by Nomura Holdings Inc., which shows that seven emerging economies are at risk of an exchange rate crisis. According to these media sites, Nomura’s analysis lists Sri Lanka as the country that is most vulnerable to an exchange rate crisis. The article that appeared on www.ft.comquotes Nomura analysts as saying Sri Lanka had the worst outlook, and “with high short term external debt (US$ 160 billion), [Sri Lanka]’s refinancing needs are large.”
Given the fact that Sri Lanka’s short term external debt is nowhere near the US$ 160 billion figure that Nomura analysts have quoted, it appears that Nomura Holdings have made a serious computational error with regard to Sri Lanka’s external vulnerability.
As such an erroneous report could to trigger an unwarranted panic amongst investors, particularly in the context of current volatile global market conditions, the Central Bank of Sri Lanka has already written to Nomura Holdings, and requested them to correct this error without any delay.
- CBSL

DS Wijesinghe


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
It is the response by the Central Bank which is grappling with this issue and denying any such danger

Will Foreign Investors and International Community believe the denial from our Central Bank which is now identified with a bank robbery govt. causing massive losses to the country or AN INDEPENDENT INTERNATIONAL ORGANISATION FROM JAPAN?

ruwan326

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
@DS Wijesinghe wrote:It is the response by the Central Bank which is grappling with this issue and denying any such danger

Will Foreign Investors and International Community believe the denial from our Central Bank which is now identified with a bank robbery govt. causing massive losses to the country or AN INDEPENDENT INTERNATIONAL ORGANISATION FROM JAPAN?
Well DS, Today foreign INFLOW 74MN and lets see coming weeks     leave the politics ......It's not MR or M3/Ranil property and as investors we should be happy if MR Market goes up 

DS Wijesinghe


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@ruwan326 wrote:
@DS Wijesinghe wrote:It is the response by the Central Bank which is grappling with this issue and denying any such danger

Will Foreign Investors and International Community believe the denial from our Central Bank which is now identified with a bank robbery govt. causing massive losses to the country or AN INDEPENDENT INTERNATIONAL ORGANISATION FROM JAPAN?
Well DS, Today foreign INFLOW 74MN and lets see coming weeks     leave the politics ......It's not MR or M3/Ranil property and as investors we should be happy if MR Market goes up 
Leave politics aside Ruwan and come to terms with the reality

Rather than looking at figures on a daily basis I look at the big picture. Yesterday very proudly you said the net inflow is Rs. 74 Mn but Today the stock net outflow is Rs. 145 Mn

One way is to look at the Year to-date. You post summary of foreign stock transactions regularly in this forum and can you please share the year to-date value ? Is the CSE net out flow now close to Rs. 3 Billion ?

According to Reuters 

Foreign investors have sold a net 46.9 billion rupees ($289.6 million) worth of securities so far this year, central bank data showed. ($1=161.95 Sri Lankan rupees)

ruwan326

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
@DS Wijesinghe wrote:
@ruwan326 wrote:
@DS Wijesinghe wrote:It is the response by the Central Bank which is grappling with this issue and denying any such danger

Will Foreign Investors and International Community believe the denial from our Central Bank which is now identified with a bank robbery govt. causing massive losses to the country or AN INDEPENDENT INTERNATIONAL ORGANISATION FROM JAPAN?
Well DS, Today foreign INFLOW 74MN and lets see coming weeks     leave the politics ......It's not MR or M3/Ranil property and as investors we should be happy if MR Market goes up 
Leave politics aside Ruwan and come to terms with the reality

Rather than looking at figures on a daily basis I look at the big picture. Yesterday very proudly you said the net inflow is Rs. 74 Mn but Today the stock net outflow is Rs. 145 Mn

One way is to look at the Year to-date. You post summary of foreign stock transactions regularly in this forum and can you please share the year to-date value ? Is the CSE net out flow now close to Rs. 3 Billion ?

According to Reuters 

Foreign investors have sold a net 46.9 billion rupees ($289.6 million) worth of securities so far this year, central bank data showed. ($1=161.95 Sri Lankan rupees)
YTD outflow RS 4.42 BN

DS Wijesinghe


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
That's the figure we are worried about and not the once in a way a day's net foreign inflow figure

ruwan326

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
@DS Wijesinghe wrote:That's the figure we are worried about and not the once in a way a day's net foreign inflow figure
Don't worry too much DS,
Wait till EPF come back.

DS Wijesinghe


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@ruwan326 wrote:
@DS Wijesinghe wrote:That's the figure we are worried about and not the once in a way a day's net foreign inflow figure
Don't worry too much DS,
Wait till EPF come back.

The question is 'when' Ruwan.

In the first place this govt (sorry you might get hurt but I have to tell this) should not have stopped EPF investing in the CSE. They told the people that EPF money was used for SOME shady share deals(which is true) in the CSE and therefore stopping it

They stopped investing in CSE and instead invested in the fraudulent bonds causing massive losses to EPF

Do we need ADB to tell us to restart investing in CSE? Is this govt(sorry but have to mention) so short of some brains?

Please remember that the mandate of EPF is not to bail out the Colombo Stock market. It's mandate is to earn the best possible return to it's members. I hope they will not go and dump EPF money to buy JKH @130-140/- 

Govt should not use EPF money to bail out foreign or local investors trapped with their investments in the CSE

ruwan326

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
@DS Wijesinghe wrote:
@ruwan326 wrote:
@DS Wijesinghe wrote:That's the figure we are worried about and not the once in a way a day's net foreign inflow figure
Don't worry too much DS,
Wait till EPF come back.

The question is 'when' Ruwan.

In the first place this govt (sorry you might get hurt but I have to tell this) should not have stopped EPF investing in the CSE. They told the people that EPF money was used for SOME shady share deals(which is true) in the CSE and therefore stopping it

They stopped investing in CSE and instead invested in the fraudulent bonds causing massive losses to EPF

Do we need ADB to tell us to restart investing in CSE? Is this govt(sorry but have to mention) so short of some brains?

Please remember that the mandate of EPF is not to bail out the Colombo Stock market. It's mandate is to earn the best possible return to it's members. I hope they will not go and dump EPF money to buy JKH @130-140/- 

Govt should not use EPF money to bail out foreign or local investors trapped with their investments in the CSE
What ever you said to present government or past government doesn't bother me. Sri lankan politics never bring us anything and we all know for last 70 years same ministers all the way changing parties and only president/prime minister change.

Day by day this country heading toward worst countries list, don't expect politicians will save us.

every one talk about corruption when they don't have power and once they got the power same shit...........

ranferdi

avatar
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@DS Wijesinghe wrote:
@ruwan326 wrote:
@DS Wijesinghe wrote:That's the figure we are worried about and not the once in a way a day's net foreign inflow figure
Don't worry too much DS,
Wait till EPF come back.

The question is 'when' Ruwan.

In the first place this govt (sorry you might get hurt but I have to tell this) should not have stopped EPF investing in the CSE. They told the people that EPF money was used for SOME shady share deals(which is true) in the CSE and therefore stopping it

They stopped investing in CSE and instead invested in the fraudulent bonds causing massive losses to EPF

Do we need ADB to tell us to restart investing in CSE? Is this govt(sorry but have to mention) so short of some brains?

Please remember that the mandate of EPF is not to bail out the Colombo Stock market. It's mandate is to earn the best possible return to it's members. I hope they will not go and dump EPF money to buy JKH @130-140/- 

Govt should not use EPF money to bail out foreign or local investors trapped with their investments in the CSE

Agreed.. We need an independent group of Fund Managers in EPF to manage the funds to recommend shares.

http://::::THIS EMAIL DOESNT WORK.. PLEASE CONTACT ME ON FB ACCO

Miss-Sangeetha

avatar
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Sri Lanka Rupee hits fresh low

The Sri Lankan Rupee dropped to new record low on Friday as the selling price reached 164.37 against the US Dollar.

The Central Bank of Sri Lanka (CBSL) has recorded the buying price at 160.94.

The local currency surpassed an earlier low of 162.92, hit in the previous session.

The rupee is down 1.2 percent this month and 6.5 percent so far this year.

Source- Adaderena

Miss-Sangeetha

avatar
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Sri Lankan rupee plunges further low

 Sri Lankan Rupee plunges further to a new low against the US Dollar as the selling pries reaches Rs 165.14, reports Central bank of Sri Lanka.

The buying price of a US Dollar is marked at Rs 161.81 and this is the 1st time Sri Lankan Rupee has surpassed these marks.

Meanwhile, on Friday (14)the selling price of a US Dollar surpassed Rs 164.

 

www.adaderana.lk/news/50064/sri-lankan-rupee-plunges-further-low

Miss-Sangeetha

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Sri Lankan Rupee falls to record low

The Sri Lankan has depreciated against the US Dollar, today (20), to a new record low as the selling rate closed at Rs 168.63.

Meanwhile, the buying rate of the US Dollar has reached Rs 165.08, stated Central Bank of Sri Lanka.

Source-Adaderana

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Central bank not intervening means dollar is moving up on fundamentals wenna athi

TuTanKaman


Senior Equity Analytic
Senior Equity Analytic
US increasing rate. SL has so far not increased. thats why usd is strengthening. In contrast to previous regime cbsl is not releasing dollar reserve to the market to stabilize.
Read the economic concept of 'impossible trinity'
Previous regime forcefully made it possible. And now we are fealing the impact so high than others. Mind you populist economic policies can win election but not a sustainable economy.
I expect interest rate to go up in the future.

TuTanKaman


Senior Equity Analytic
Senior Equity Analytic
Currently the govt priority is to repay loans which require dollar reserves. Any default will be detrimental to the entire country since SL will fall below investment grade there by cant borrow

DS Wijesinghe


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Govt. cannot release foreign reserves to manage rupee depreciation: Harsha


As the rupee depreciates daily to new lows, National Policies and Economic Affairs State Minister Dr. Harsha Silva yesterday defended the Government’s stance to refrain from artificially managing the value of the currency, warning of the negative impact an interference may bring.

“As a responsible government we have to come to an agreement and face reality, to ensure the continuity of a stable economic environment we can’t intervene to stabilise the rupee,” he said, speaking at a special press briefing held in Parliament.





The rupee has depreciated by 7.4 % against the US dollar he said, highlighting that the rate was lower than most other currencies in the region including the Indian rupee.

The State Minister of National Policies and Economic Affairs stressed that even if the Government decided to release foreign reserves currently held by the Central Bank, it would not deliver the desired results due to a lack of confidence in Sri Lanka.

“If we release the $9 billion held as reserves the market will not believe that we can do it. The reason is that there is a huge loan burden as never seen before in in Sri Lanka’s history, payable in the future. We have to pay the $4billion taken as international sovereign bonds. This loan is not like earlier debt with long payment periods and low interest rates; these have bullet payments, we have to pay large sums of money and high interest rates,” he claimed.

As a responsible government we cannot release the dollars as we have to repay over $15 billion in the coming years.

The net absorption in the country has improved during the last two years, he claimed. According to him, under the new Central Bank, along with IMF reforms, Sri Lanka has retained reserves from the market as never before, recording a positive net absorption rate of $1,664 million in 2017 from the previous year’s negative $768 million and in 2016, Silva said while quoting figures. 

In 2010 the absorption rate was at a negative $ 67 million, in 2011 the absorption rate was a negative $2,840 million while in 2012 the figure remained a negative $1,166 million, which caused the IMF to raise concerns, the Deputy Minister said. In 2013 the figure turned a positive $ 436 million and continued to maintain a positive figure of $ 545million. However, the absorption rate turned a negative $3,250 million in 2015 and continued to be a negative $ 768 million in 2016, he said.  

Staunchly defending the Government’s decision not to manage the currency value through the release of foreign reserves, he accepted that there would be challenges in the cost of living and salaries which the country’s economy would have to face.

However, the State Minister explained that the worst was yet to come with upcoming elections in the United States and the trade wars US president Trump had started with economic giants such as China and Europe, but said the crisis may settle with the November elections.

The State Minister also warned that if the country did not take long-term corrective actions to increase exports, which are currently at 12% of GDP compared to 35% of GDP in 2000, the repercussions would be far worse.

“This is the fundamental issue. We can manage in the short term but if we don’t increase exports then we are not going to make a sustainable recovery,” he said, adding that engaging in cheap politics would not help in the long term.


http://www.ft.lk/front-page/Govt--cannot-release-foreign-reserves-to-manage-rupee-depreciation--Harsha/44-663276

samaritan


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
The rate at which rupee is depreciating even 200/= cannot be ruled out by year end. Majority of the people are going to face unprecedented hardships and not Harshas & Rajithas. The move to increase public sector salaries will lead to printing currency finally leading to hyper inflation. The economy is set to crumble!
Appreciate the good job carried out by Ajit Nivard. The present Governor is not given a free hand and hence appears to be constipated.

Miss-Sangeetha

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Sri Lankan rupee pulls back from record low after central bank intervention
 

The Sri Lankan rupee hit a record low for an eighth straight session on Friday, but closed the session firmer following intervention by the central bank, market sources said.
The central bank will intervene aggressively to curb excess volatility in the exchange rate, Senior Deputy Governor Nandalal Weerasinghe told Reuters.
“We will not tolerate excess volatility that we have seen in the market during the last couple of days. We will intervene aggressively,” he said.
The rupee fell to an all-time low of 169.00 per dollar before closing at 168.50/70, compared with Thursday’s close of 168.65/169.00. The previous record low was 168.70 per dollar hit on Thursday.
Exporters expect the rupee to be under pressure due to continued importer dollar demand and less exporter dollar sales.
The rupee has weakened 4.5 percent so far this month after a 1.2 percent drop last month, and has declined 9.9 percent so far this year.
The dollar weakened against most of its rivals on Friday, barring the British currency, as stronger equity markets and rising bond yields fuelled a rush to buy riskier assets.
The dollar index, which tracks the dollar against a basket of six major rivals, dipped 0.18 percent to 94.371. The dollar was 0.04 percent lower against the yen at 112.25, while the euro was 0.26 percent stronger against the greenback at $1.1700.
An illiquid market for dollars, dollar buying by foreign banks to facilitate bond outflows and importer demand weighed on the currency, said the sources.
Since last week, currency dealers have been refusing to speak to the media, citing instructions from the central bank. However, central bank Governor Indrajit Coomaraswamy said that he was unaware of any such move.
The rupee will be under pressure due to year-end seasonal dollar demand from importers, dealers have said earlier.
The currency has also been hurt by recent weakness in the Indian rupee. India is Sri Lanka’s biggest trading partner and the Indian rupee, which hit a record low on Tuesday, is Asia’s worst performing currency this year.
Foreign investors sold government securities worth a net 8.8 billion rupees ($52.19 million) in the week ended Sept. 19, its highest weekly outflow since the week ended on Dec. 6. Sri Lanka has suffered a net outflow of 63.7 billion rupees in securities so far this year, central bank data showed.
Source-Adaderana & Reuters 

ruwan326

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Vice President - Equity Analytics
Vice President - Equity Analytics
Rupee hits fresh low; CB intervention caps fall-Thursday, 27 September 2018

Reuters: The Sri Lankan rupee hit a fresh low of 169.05 on Wednesday on importer dollar demand, while intervention by the central bank limited the fall, market sources said.

Sri Lanka’s Finance Minister urged its people to buy local products and shun unnecessary imports in order to reduce the trade deficit and help stabilise a weak rupee, a day after Prime Minister Ranil Wickramasinghe said the Government would take measures to impose taxes to curb imports by up to $1 billion to face the currency crisis.

The rupee fell to an all-time low of 169.05 per dollar on Wednesday, surpassing its previous low of 169.00 hit on Friday. It closed at 169.00/169.20 per dollar, compared with Tuesday’s close of 168.90/169.00.

The Central Bank will intervene aggressively to curb excess volatility in the exchange rate, Senior Deputy Governor Nandalal Weerasinghe had told Reuters on Friday.

Exporters expect the rupee to be under pressure due to continued importer dollar demand.

The rupee has weakened 4.6% so far this month after a 1.2% drop last month, and is down 10% so far this year.

The dollar rose modestly on Wednesday before a widely anticipated Federal Reserve interest rate hike priced in by investors still on edge about a trade row between the United States and China.

Dollar buying by foreign banks to facilitate bond outflows and importer demand weighed on the currency, but the Central Bank’s intervention prevented a sharp fall in the currency, sources said.

The rupee will be under pressure due to year-end seasonal dollar demand from importers, dealers have said earlier.

The currency has also been hurt by recent weakness in the Indian rupee. India is Sri Lanka’s biggest trading partner and the Indian rupee, which hit a record low on 18 September, is Asia’s worst performing currency this year.

Foreign investors sold government securities worth a net Rs. 8.8 billion ($52.19 million) in the week ended 19 September, its highest weekly outflow since the week ended 6 December 2017. Sri Lanka has suffered a net outflow of Rs. 63.7 billion in securities so far this year, Central Bank data showed. 
http://www.ft.lk/front-page/Rupee-hits-fresh-low--CB-intervention-caps-fall/44-663540

Miss-Sangeetha

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Sri Lankan shares recover from near 5-yr closing low on bargain- hunting
 Sri Lankan shares recovered from their lowest close in nearly five years hit in the previous session and ended about 1 percent higher on Wednesday as investors picked up battered stocks.
The benchmark index hit a near five-year low on Tuesday on foreign selling amid a weaker rupee and government plans to curb imports hurt investor sentiment.
The Colombo stock index rose 0.92 percent to 5,887.52, pulling away from its lowest close since Dec. 18, 2013 hit on Tuesday.
“Market bounced back with buying in heavyweights like John Keells which came down over the last few days,” said Hussain Gani, deputy CEO, Softlogic Stockbrokers.
“We have seen some investors picking up value shares. But most of the investors are still waiting to see if the rupee is stabilising and the economic impact of rupee’s fall.”
Prime Minister Ranil Wickramasinghe said on Monday the government would take measures to impose taxes to curb imports by $500 million to $1 billion to face the currency crisis.
Sri Lanka’s finance minister urged its people to buy local products and shun unnecessary imports in order to reduce the trade deficit and help stabilise a rupee currency that revisited its all-time low on Wednesday.
The rupee has weakened 4.6 percent so far this month after a 1.2 percent drop last month, and has declined 10 percent so far this year.
Analysts said the acceleration in the rupee’s depreciation was creating panic among investors.
Turnover was 318.5 million rupees ($1.89 million), less than half of this year’s daily average of 790.8 million rupees.
Foreign investors sold a net 49.6 million rupees worth of shares on Wednesday, extending the year-to-date net foreign outflow to 5.7 billion rupees worth of equities.
Analysts said the recent fuel price hike also hurt investor confidence as it could hit corporate earnings. Fuel retailers raised gasoline and diesel prices earlier this month for a third time in four months due to higher global oil prices and a weaker rupee.
Investors are awaiting cues from the national budget in November.
Shares of conglomerate John Keells Holdings Plc rose 3.8 percent while Sri Lanka Telecom Plc jumped 6.5 percent and Commercial Leasing and Finance Company Plc closed 8.0 percent firmer.
 

Source- Reuter & Adaderana 

DS Wijesinghe


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@TuTanKaman wrote:US increasing rate. SL has so far not increased. thats why usd is strengthening. In contrast to previous regime cbsl is not releasing dollar reserve to the market to stabilize.
Read the economic concept of 'impossible trinity'
Previous regime forcefully made it possible. And now we are fealing the impact so high than others. Mind you populist economic policies can win election but not a sustainable economy.
I expect interest rate to go up in the future.


Miss-Sangeetha

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Sri Lankan Rupee drops to Another new low

The Sri Lankan Rupee has further depreciated against the US Dollar as the selling price reached 171.42 - a new record low - on Thursday.

Meanwhile the buying price of the US Dollar is at Rs 167.55, according to the Central Bank of Sri Lanka (CBSL).

The Government announced several temporary measures last week to ease the pressure on the Sri Lankan rupee.

The Central Bank says it has intervened by US$ 184 million on a net basis so far this year to defend the depreciation of the Sri Lankan Rupee.

“So far we’ve had a 9.5% depreciation but on a net basis so far we have only spent US$ 184 million,” CBSL Governor Dr. Indrajit Coomaraswamy told reporters on Tuesday.
Source- Adadana

ruwan326

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Vice President - Equity Analytics
Vice President - Equity Analytics

@Miss-Sangeetha wrote:Sri Lankan Rupee drops to Another new low

The Sri Lankan Rupee has further depreciated against the US Dollar as the selling price reached 171.42 - a new record low - on Thursday.

Meanwhile the buying price of the US Dollar is at Rs 167.55, according to the Central Bank of Sri Lanka (CBSL).

The Government announced several temporary measures last week to ease the pressure on the Sri Lankan rupee.

The Central Bank says it has intervened by US$ 184 million on a net basis so far this year to defend the depreciation of the Sri Lankan Rupee.

“So far we’ve had a 9.5% depreciation but on a net basis so far we have only spent US$ 184 million,” CBSL Governor Dr. Indrajit Coomaraswamy told reporters on Tuesday.
Source- Adadana

samaritan


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
President or PM is not at all concerned about rupee depreciation. Their focus is on competing to secure their vote base in the North & East for the next election. In the mean time i go Norway, you go Seychelles and let the rupee go to Timbuktu!

Yahapalanaya

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Vice President - Equity Analytics
Vice President - Equity Analytics
@samaritan wrote:President or PM is not at all concerned about rupee depreciation. Their focus is on competing to secure their vote base in the North & East for the next election. In the mean time i go Norway, you go Seychelles and let the rupee go to Timbuktu!
Isn't North & East in Srilanka!!!!!

samaritan


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@Yahapalanaya wrote:
@samaritan wrote:President or PM is not at all concerned about rupee depreciation. Their focus is on competing to secure their vote base in the North & East for the next election. In the mean time i go Norway, you go Seychelles and let the rupee go to Timbuktu!
Isn't North & East in Srilanka!!!!!
Did it take 4 years for President to know that North & East is in SL?????

It can be clearly seen that President & PM are outdoing each other targeting votes in the North. Now PM will come back and make an order to release all political prisoners (Minister of justice differs in the nomenclature). This may probably take place when President is in Seychelles.

The Govt is in the process of delaying elections b'cos they are very very well aware about the humiliating defeat staring at them.

Miss-Sangeetha

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Sri Lankan rupee rises on exporter dollar sales; stocks extend falls
The Sri Lankan rupee strengthened 0.5 percent on Friday, as inward remittances and exporters dollar sales surpassed mild importer demand for the greenback, while stocks declined for a fourth straight session and posted their lowest close in more than one week.
The rupee ended at 169.40/70 per dollar, compared with the previous close of 171.20/40. The rupee fell to an all-time low of 171.60 per dollar on Wednesday, surpassing the previous low of 171.00 hit on Tuesday due to foreign selling in government securities and exporter greenback sales, market sources said. The central bank surprised financial markets on Oct. 2 by leaving its key policy rates unchanged, despite heavy pressure on the rupee and foreign outflows from government securities. The central bank said on Oct. 2 it purchased 4 million dollars from the market in the previous day, but it has sold a net 184 million dollars in the market so far this year to defend the currency.
The rupee has weakened 0.3 percent so far this month after a 4.7 percent drop in September against the dollar. It has declined 10.5 percent so far this year.
The Colombo stock index fell 0.4 percent to 5,815.03, its lowest close since Oct. 3. It fell 3.6 percent last month and is down 8.7 percent so far this year.
Data from the central bank showed foreign investors sold government securities worth a net 1.8 billion rupees ($10.58 million) in the week ended Oct. 3. Sri Lanka has seen a net outflow of 74.3 billion rupees in securities so far this year.
Stock market turnover was 408.9 million rupees ($2.41 million) on Friday, more than half of this year’s daily average of 765 million rupees.
Foreign investors were net sellers of 311.5 million rupees worth of shares on Friday, extending the year to date net foreign outflow to 6.6 billion rupees worth of equities. 
Source-Adaderana& Reuters



Last edited by Miss-Sangeetha on Sun Oct 14, 2018 9:32 am; edited 1 time in total

Miss-Sangeetha

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
US$ 184 Million spent to defend Rupee CBSL Governor
Source- Adaderana

ruwan326

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Vice President - Equity Analytics
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@Miss-Sangeetha wrote:
US$ 184 Million spent to defend Rupee CBSL Governor
Source- Adaderana
ඔයා  පරණ NEWS නේ දාන්නේ  Wink

Yahapalanaya

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Vice President - Equity Analytics
Vice President - Equity Analytics
[size=48]Sri Lankan currency fears are overblown, Mangala tells Nikkei
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Comments /  435 Views / Monday, 15 October 2018 01:09
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  • Says depreciation promotes goal of an export-led economy



[size=17]Nusa Dua, Indonesia (asia.nikkei.com): The sharp decline of Sri Lanka’s currency is “not as catastrophic as people make it out to be,” Finance Minister Mangala Samaraweera said in an interview this week, as the country looks to transform itself into an export-powered economy.

The Sri Lankan rupee has fallen by over 10% against the dollar this year, making it one of the worst performing currencies in emerging Asia. 



The country has imposed restrictions on vehicle imports, often the cause of balance of payments trouble for Colombo. Yet, Samaraweera said the currency depreciation - brought on by the Fed’s interest rate hikes and investor concerns about emerging market assets amid the US-China trade war - is a potential positive for his country.

“We have been trying to drive Sri Lanka toward an export-oriented economy,” said the finance minister, who was attending the International Monetary Fund and World Bank annual meetings in Bali. “And this crisis, in a way, makes people realise the need to do so even more vigorously. I don’t consider it a crisis at all.”



Samaraweera said the country’s underlying economic fundamentals are solid, with stable inflation and a primary balance surplus for 2017 - the first in 63 years. “The exports, last year, the numbers were record breaking. The FDIs are flowing in. If you actually look at the numbers, our growth rate ... [for] the last quarter has come up to 3.7%, we are just about to go 4% this year.”

While currency depreciation may be a blessing in disguise for Sri Lanka, Samaraweera, who chairs the G-24 - a group of developing nations from Africa, Asia, and Latin America and the Caribbean - said volatility stirred up by the trade war poses a risk to the emerging world.

For now, he stressed, “there is certainly not yet fear” among G-24 members that recent capital outflows from emerging markets will turn into full-blown capital flight. But he said developing nations need to “face this challenge together.”



“Emerging economies had to face several serious challenges because of the external volatility, and many countries are basically battling it alone,” Samaraweera said. “We feel if the crisis is going to get worse ... then I think we have to have a coalition of the willing, who will work out these strategies to meet these challenges.”

Sri Lanka has been in the news recently because US Vice President Mike Pence cited it as an example of China’s so-called “debt trap” diplomacy. Sri Lanka “took on massive debt to let Chinese state companies build a port with questionable commercial value,” Pence said, pointing to the port of Hambantota. Saddled with debt payments on Chinese loans extended under the Belt and Road Initiative, Colombo leased the port to a Chinese state-owned company for 99 years.

Samaraweera noted that when the current government took power in 2015, it renegotiated clauses in the original infrastructure deals with China that were “inimical to the interests” of Sri Lanka.



“Sri Lanka is more or less in control of all these projects and to now call these a Chinese debt trap is a bit unfair. We are very much on top,” the finance minister said.

“You have the Darwin harbour in Australia, which has been more or less given over to the Chinese. So many harbours and ports in Europe that the Chinese have invested in, but no one is calling them Chinese debt traps. Why is that word only being used on Sri Lanka? That gives a false image of the country.”

(Source: https://asia.nikkei.com/Editor-s-Picks/Interview/Sri-Lankan-currency-fears-are-overblown-finance-minister-argues)
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