The sell/offer rate of the benchmark ‘spot’ weakened for the second consecutive market day to today, this time by 0.23 per cent (0.75 rupees) to Rs 321 to the US dollar due to sustained buying pressure by the Central Bank of Sri Lanka (CBSL) to uplift the country’s parlous foreign reserves, though its ‘buy’ rate remained unchanged at Rs 320 due to ‘excess’ supply, resulting in the ‘spot’ being quoted at Rs 320/321 to the dollar in two way quotes, market sources who didn’t want to be named told ‘BMD.’
However, the ‘spot’ has gained by between 3.03 per cent to 5.59 per cent (10- 19 rupees) to Rs 320/321 to the dollar in two way quotes, year on year (YoY) to today, thereby defraying cost-push inflationary pressure, data showed. A year ago the ‘spot’ was trading weaker at Rs 330/340 to the dollar in two way quotes, weaker by between 1.54-1.49 per cent (five rupees) over its previous day’s close, statistics further showed.
In related developments, CBSL weakened the official ‘spot’ by 0.11 per cent (Rs 0.36) to Rs 319.93 to the dollar today. Nonetheless, a year ago, CBSL, then under the purview of Basil Rajapaksa who was the Finance Minister at that time, he kept the administered ‘spot’ unchanged at Rs 313.67 to the dollar, thereby resulting in a YoY weakening of the official ‘spot’ by two per cent (Rs six) to the dollar.
‘Spot’ trades are settled after two market days from the date of trading. CBSL the steward of GoSL debt and of its foreign reserves deals in the official ‘spot.’ The official ‘spot’ is usually artificially propped up to minimize the cost of GoSL’s foreign debt in rupee terms and also to minimize GoSL’s foreign debt servicing costs in rupee terms.