The country’s foreign reserves have been blown by US$ 791.89 million (Rs 137,614 million) in the four market days to yesterday since the appointment of Mahinda Rajapaksa as Premier which took place after the close of markets on Friday, followed by his appointment as Finance Minister as well..
This haemorrhage of the country’s foreign reserves is due to a combination of foreign investors exiting from the country’s Treasury Bond market, Government of Sri Lanka (GoSL) meeting huge import bills from the country’s foreign reserves and Government’s foreign debt servicing commitments.
Yesterday alone the country’s foreign reserves bled by $ 384.38 million* (Rs 113,292.91 million) due to such commitments. The foreign exchange market is avoided to meet these payments to avoid further pressure on an already beleaguered rupee, with Christmas import demand also chipping in on the local currency, in between.
*Conversions are based on the middle rate of the closing value of the benchmark ‘spot’ as at Tuesday which was Rs 174.70 to the US dollar. ‘Spot’ trades are settled after two market days from the date of trading.