Thursday Nov 14, 2024
Thursday Nov 14, 2024
Friday, 3 March 2023 00:33 - - {{hitsCtrl.values.hits}}
The Central Bank (CBSL) yesterday further expanded the trading band of USD /LKR.
CBSL Governor Dr. Nandalal Weerasinghe directed banks to use Rs. 353.65 as the middle spot Exchange rate of USD/LKR interbank transactions and the variation margin of Rs. 7.50 on either side (+/-) of the middle spot exchange rate.
He also said rates applicable to other currency transactions against the Sri Lanka Rupee should also be derived based on the new USD/LKR middle spot exchange rate and the variation margin.
Previously on 27 February, the CBSL expanded the daily trading band to +/- Rs. 5.00 of the middle spot exchange rate. Prior to that revision, the variation margin was +/- Rs. 2.60.
Yesterday the CBSL quoted USD telegraphic transfers rate as Rs. 343.97 (buying) and Rs. 356.73 (selling). On Wednesday they were Rs. 351.72 and Rs. 362.95 respectively.
Wealth Trust Securities said the USD/LKR on cash to spot contracts were traded within the range of Rs. 346.15 to Rs. 347.00 while the middle rate for USD/LKR spot contracts appreciated further to Rs. 353.6543 against its previous days of Rs. 358.4593.
The AFP reported that the US dollar stood at 136.40 yen in Asian trade yesterday, against 136.17 yen in New York on Wednesday. It said talk of more aggressive US rate hikes boosted the dollar on Thursday. There is a growing expectation rates would top out around 5.5%, though some commentators are tipping 6%, from the current 4.5-4.75%.
The rise of Rupee comes amidst a rebounding US Dollar.
Reuters in a report filed out of New York on Wednesday said the dollar has risen nearly 4% from its recent lows and stands near a seven-week high against a basket of other major currencies , driven by bets the Federal Reserve will need to raise rates higher than many investors had previously forecast to cool inflation.
The U.S. currency remains some 8% below the twenty-year high it attained last year. Yet its rebound, along with a surge in Treasury yields, has already complicated the outlook for a range of trades that prospered as the dollar tumbled in the latter half of 2022.
A stronger dollar tends to tighten global financial conditions while diminishing appetite for risk-taking and weakening global trade, the Bank for International Settlements said in a report in November. It also makes it more difficult for countries that borrowed in the U.S. currency to service their debt, a problem often acutely felt by emerging market economies.
