Senior Deputy Governor of Central Bank, Dr. P. Nandalal Weerasinghe has written to President and Group CEO of Nomura Holdings INC, Koji Nagai asking them to correct an erroneous report on Sri Lanka’s exchange rate which was quoted by several global media organisations.
The letter in full;
“I write with reference to the articles published by several international media sites quoting a new analysis by Nomura Holdings Inc., which shows that seven emerging economies are at risk of an exchange rate crisis.
According to these articles, Nomura’s analysis, which is based on the Damocles Index, lists Sri Lanka as the country that is most vulnerable to an exchange rate crisis. The article that appeared on www.ft.com quotes Nomura analysis as saying Sri Lanka had the worst outlook, and “with reserves of less than five months of import cover and high short term external debt (US$ 160 billion), (Sri Lanka’s) refinancing needs are large.”
Given the fact that Sri Lanka’s short term external debt is nowhere near the US$ 160 billion figure that your analysts have quoted, it appears that you have made a serious computational error with regard to Sri Lanka’s vulnerability, Sri Lanka’s short term debt and liabilities are currently estimated at US$ 14.3 billion. Needless to say, such an erroneous report is likely to trigger a disturbance amongst investors, and could cause irreparable damage to Sri Lanka given the current volatile global market conditions.
I am certain that Nomura Holdings Inc., understands our concern, and I shall be grateful if you could immediately correct this error, and provide similar publicity to the correction without any delay.”
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