Inflation ( CCPI)1.7% (June 2024)
GDP5.3% (1Q 2024)
Unemployment4.3% (4Q 2023)
3M T-Bill Rate9.14%
12M T-Bill Rate9.95%
2Y T-Bond Rate10.10%/ 10.20%
4Y T-Bond Rate11.60% / 11.70%
USD/LKR303/304
Reserves $5.6Bn (June 2024)
Cum. Trade Deficit $2,180 Mn (May 2024 cumulative)
Cum. Fiscal DeficitLKR 361Bn (April 2024)

CBSL continues to buy foreign currency from the market in September

Exchange RateOct 13, 2023
CBSL continues to buy foreign currency from the market in September

(Corrected) CBSL purchased USD 83 Mn in September, resulting in USD 1.727Bn net purchases for this year so far. Last year, CBSL sold USD 585Mn to manage the exchange rate. CBSLs’ involvement is visible in the FX market whenever abnormal volatility prevails.

IMF has been watchful of CBSL’s intervention in the FX market as IMF advises buying FX from the market to build foreign reserves rather than defending the currency like in the past. Tourism and worker remittances are growing at a healthy rate generating close to USD 700 to 800Mn per month, while the trade deficit is been curtailed to less than USD 500Mn per month. FX debt service is around USD 100 to 150Mn per month, resulting in balancing off the current account without much trouble.

Disclaimer

Charts represents an assessment of the market environment as of the date indicated and it is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

The information presented does not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy or investment decision. This document contains general information only and does not take into account an individual’s financial circumstances. An assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decisions.