CBSL denies asking banks to “devalue” rupee

Thursday, 19 August 2021 00:23 -     - {{hitsCtrl.values.hits}}

The Central Bank of Sri Lanka (CBSL) yesterday, in a statement, denied reports to the effect that the monetary regulatory had asked commercial banks to devalue the rupee with immediate effect.

“The general public is hereby informed that there is no basis whatsoever for such claims, and the CBSL has not made any change to its stance or the operational arrangements on the determination of the exchange rate,” the statement said. 

CBSL also advised the public not to rely on what they labelled false and misleading information circulated through social and conventional media. 

“Any official statement issued by the CBSL will be made by the Governor, Deputy Governor or any other authorised official of the CBSL identified by name and designation,” the statement added.

In an apparent response to the Central Bank statement, Samagi Jana Balawegaya MP Dr. Harsha de Silva tweeted: "So banks showed @CBSL the middle finger! The nonsensical rate of Rs. 202 to the USD held by strong moral suasion @an_cabraal et all said would appreciate to 185 crashed to Rs. 215. Kerb rate is 230+. Nothing to be surprised. Markets always win. More to come.”

Original speculation was that banks had been asked to devalue the Rupee from Rs. 203 to the US Dollar to Rs. 211. In the grey market, the dollar was trading at between Rs. 220 and Rs. 243. 

On Tuesday total USD/LKR traded volume was $ 40 million as against $ 11.5 million the previous day, according to Wealth Trust Securities. 

CBSL yesterday indicated the Telegraphic Transfer (TT) of the dollar buying rate as Rs. 198.39 and the selling rate as Rs. 202.89. The rates were Rs. 198.19 and Rs. 202.89 on Tuesday. The Indicative US Dollar SPOT Exchange rate was stated as Rs. 199.90, down from Rs. 199.92 on Tuesday and Rs. 199.98 on Monday.

The Daily FT yesterday reported that the dollar exchange rate for the rupee had shot up sharply with dealers quoting high prices, raising fresh concerns and confusion among the import and export trade.

As opposed to the Central Bank's indicated rates, commercial banks were quoting Rs. 211 as selling rate for TT, reflecting a difference of over Rs. 8 on the latter. 

“Local commercial banks were selling dollars at around Rs. 211 while foreign banks were selling it around Rs. 215,” the import and export trade confirmed.

CBSL last week said that during the year up to 13 August the rupee recorded a depreciation of 6.8% against the dollar. Last week, the official selling rate of the dollar was Rs. 202.90 as against Rs. 183 a year ago.


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