Forex, primary dealers welcome Central Bank’s 2013 Road Map

Saturday, 5 January 2013 00:00 - - {{hitsCtrl.values.hits}}

By Shabiya Ali Ahalam

The foreign exchange and debt market yesterday welcomed the Central Bank’s ‘Road Map for 2013 and Beyond,’ unveiled on Wednesday.

The Central Bank announced a slew of new measures to be implemented with immediate effect and during 2013 and beyond, aimed at improving the foreign exchange and debt market.

The Sri Lanka Forex Association (SLFA) said that it welcomed the recent exchange control relaxations announced in the latest Road Map.

The SLFA has held discussions with senior officials of the Central Bank with regard to the increasing of Net Open Position (NOP) limits of licensed commercial banks, tenure limits on customer bookings of forward transactions, and bringing in broader guidelines on selected derivative products. “We are happy that the discussions had been fruitful. The relaxations would help the overall broader market participants such as exporters and importers in being more competitive and help manage their balance sheets in an efficient manner,” SLFA Secretary Haren Obeyesekere said.

Association of Primary Dealers President S. Palihawardana said the elements in Road Map were certainly positive from many aspects and can be fulfilled.

According to him, positive features include the increase in foreign exchange overnight limit levels as this ought to allow markets to determine rates and banks will be able to hold the positions. However, challenges prevailing in the implementation of certain items on the Road Map were noted as a timeframe of one year is set.

“A lot of work is to be done. Countries like India took nearly four to five years to achieve similar targets, but the Central Bank has set a timeline of one year, and that is a challenge in itself,” Palihawardana told the Daily FT.

He further stated that more elements could have been included in the Road Map but acknowledged that only so much can be realistically incorporated and actually be implemented. Palihawardana expressed that the association is geared up for the year and extends its fullest support to the Central Bank.