A front-line currency and exchange rate expert yesterday underscored the importance of political and economic stability, which he said, were all, a sine- qua- non if the Rupee was to stabilize in the short and medium term.
There criteria are also important to safeguard investor confidence, he said. The prospects of the Rupee stabilizing were very positive with tourism earnings and foreign remittances billed for improvement in the months of November and December 2018, Chairman of Wealth Lanka Management Private Ltd Mangala Boyagoda told Daily News Business.
Boyagoda pioneered six debt instruments in the local market. The first was the Rs. 100 Million Commercial Paper for the Bank of Ceylon in 1993 which were followed by the first Commercial paper which was linked to the All Share Price Index, the Foreign Currency Commercial Paper linked to the Dow Jones Index, the Bull and Bear Commercial Paper, the Forward Rate Agreement and the Interest Rate Cap Interest Inflows.
He also said that the Rupee would settle at around 172 to the Dollar in the short term strictly on the basis that there were no shortfalls in tourist arrivals, the arrival of the foreign remittances and also based on the strict assumptions of no withdrawals from the Government Securities Market as well.
One of the reason why the Rupee depreciated was the seasonal imports which took place in September and October as due to the supply and demand and the reason why it appreciated was the Central Bank selling some dollars recently. He also predicted that the demand for the dollar would be less with the Central Bank deciding to curb imports.
He also said that the investment climate in the Stock Market were also positive which means that the Rupee would stabilize with the inflow of investments into equities. Meanwhile, top private sector banking sources also told Daily News Business on the basis of anonymity that the Sri Lankan Rupee should also stabilize in the backdrop of regional currencies also moving gradually towards stability which has begun now.
Meanwhile, Treasury Secretary Sajith Attygalle was quoted by the Sunday Observer yesterday as having saying that the stability of the Rupee was the top most priority of the Government and that it was expected to settle soon with the economic fundamentals improving from now on with agriculture, power generation also improving the economy from now onwards.
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