The benchmark ‘spot’ continued to weaken for the fifth consecutive market day to today due to sustained buying pressure by the Central Bank of Sri Lanka (CBSL) to uplift the country’s parlous foreign reserves, falling this time by between 0.08-0.09 per cent (0.25-0.30 rupees) in two way quotes to be trading at Rs 321.50/321.80 to the US dollar, market sources who didn’t want to be named told ‘BMD.’
However, the ‘spot’ has sharply gained by between 5.44 per cent to 6.72 per cent (18.50-23.20 rupees) to Rs 321.50/321.80 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 (21 April 2022) the ‘buy’ rate of the ‘spot’ weakened by 1.49 per cent (five rupees) to Rs 340 to the dollar, though its offer/sell rate remained unchanged at Rs 345 over its previous market day’s close, to be trading at Rs 340/345 to the dollar in two way quotes, statistics showed.
In related developments, CBSL weakened the official ‘spot’ by 0.13 per cent (0.42 rupees) to Rs 321.14 to the dollar today. In like developments, a year ago, CBSL, then under the purview of Basil Rajapaksa who was the Finance Minister at that time, weakened the administered ‘spot’ sharply by 4.84 per cent (Rs 15) to Rs 335.00 to the dollar, thereby resulting in a steep YoY strengthening of the official ‘spot’ by 4.14 per cent (Rs 13.86) to the dollar.
‘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.