The benchmark ‘spot’ after only a day’s lapse continued its downward spiral yesterday due to renewed US dollar buying by the Central Bank of Sri Lanka (CBSL) to uplift the country’s parlous foreign reserves, resulting in the ‘spot’ weakening by between 0.06-0.03 per cent (0.20-0.10 rupees) in two way quotes to be trading at Rs 321.70/90 to the US dollar, market sources who didn’t want to be named told ‘BMD.’
However, the ‘spot’ has sharply gained by between 6.75 per cent to 9.32 per cent ( 23.30-33.10 rupees) to Rs 321.50/321.80 to the dollar in two way quotes, year on year (YoY) to yesterday thereby defraying cost-push inflationary pressure, data showed. Meanwhile, a year ago (25 April 2022) the ‘spot’ weakened by between 1.47-1.43 per cent (five rupees each) to Rs 345/355 to the US dollar in two way quotes, statistics showed.
In related developments, CBSL weakened the official ‘spot’ for the third consecutive market day to yesterday (Tuesday 25 April), this time by 0.15 per cent (0.05 rupees) to Rs 321.80 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, kept the administered ‘spot’ unchanged at Rs 334.80 to the dollar, nevertheless resulting in a steep YoY strengthening of the official ‘spot’ by 3.88 per cent (Rs 13.00) 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.