 absence from the market for the third consecutive market day to today saw the benchmark ‘spot’ also being strengthened){kind=link}
Central Bank of Sri Lanka’s (CBSL’s) absence from the market for the third consecutive market day to today saw the benchmark ‘spot’ also being strengthened for the third consecutive market day, this time also sharply, ie by between Rs one-0.60 (0.33-0.20 per cent) to be trading at Rs 303.50/304.00 to the US dollar in two way quotes, sources who didn’t want to be named told ‘GlobalCEO.’
Subsequently, year on year (YoY) to today the ‘spot’ has steeply gained by between Rs 56.50-61.00 (15.69-16.71 per cent) to the dollar in two way quotes, thereby squashing demand-pull inflationary pressure.
A year ago the ‘spot’ was trading unchanged for the sixth consecutive market day to 24 May 2022 at Rs 360/365 to the dollar in two way quotes, statistics also showed. CBSL buys dollars from the market to strengthen the country’s parlous foreign reserves, but generally at the expense of weakening the rupee.
CBSL sharply strengthened the administered ‘spot for the second consecutive market day to today, this time by 0.38 per cent (Rs 1.17) to Rs 304.71 to the dollar. A year ago, CBSL kept the administered ‘spot’ unchanged at Rs 359.38 to the dollar, nevertheless resulting in a steep YoY strengthening of the official ‘spot’ by 15.21 per cent (Rs 54.67) to the dollar by today.
‘Spot’ trades are settled after two market days from the date of trading. CBSL the steward of Government of Sri Lanka (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.