Rupee Strengthens

The benchmark ‘spot’ in two way quotes strengthened by between 0.06-0.03 per cent (Rs 0.20-0.10) to Rs 321.60/80 to the US dollar after Central Bank of Sri Lanka (CBSL) withdrew from its dollar buying splurge from the market today, market sources who didn’t want to be named told ‘BMD.’

Consequentially, the ‘spot’ has sharply gained by between 6.78 per cent to 9.35 per cent (23.40-33.20 rupees) to Rs 321.60/321.80 to the dollar in two way quotes, year on year (YoY) to today, thereby defraying cost-push inflationary pressure, data showed. Meanwhile, a year ago (26 April 2022) the ‘spot’ remained unchanged at Rs 345/355 to the US dollar in two way quotes, statistics showed.

In related developments, CBSL strengthened the official ‘spot’ today (Wednesday 26 April), by 0.01 per cent (0.04 rupees) to Rs 321.76 to the dollar. In other developments, a year ago, CBSL, then under the purview of Basil Rajapaksa who was the Finance Minister at that time, sharply weakened the administered ‘spot’ by 1.69 per cent (Rs 5.67) to Rs 340.47 to the dollar, resulting in a steep YoY strengthening of the official ‘spot’ by 5.50 per cent (Rs 18.71) to the dollar, to 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.