When will be rupee depreciation stop?

shaankh · 1 When will be rupee depreciation stop? Thu Apr 26, 2012 1:17 am

shaankh

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It seems rupee is down markedly and will it settle down at 135/= per dolar level even.
If not what will happen?

sriranga · 2 Rupee on a yo-yo! Thu Apr 26, 2012 1:24 am

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Rupee recovers on CB intervention of $ 5 m
Depreciation fears remain; markets shrugs off bank comments
CB prevents further rupee fall by moral suasion
Bourse slips for the fourth straight session
Reuters: The rupee fell 1.05 per cent to a record low of 133.50 to the dollar on Wednesday on importer demand for the US currency because of concern the rupee will weaken further if the Central Bank stops supplying dollars for oil bills.
But the rupee ended at 131.65/132.00 against the dollar, firmer than Tuesday’s close of 132.00/20 after the Central Bank intervened via moral suasion and selling $ 5 million dollars, dealers said.
At least three dealers Reuters spoke to said the lowest intraday trade was done at 133.50.
“There was heavy selling by a state bank and heavy moral suasion by the Central Bank,” said one of the currency dealers, who declined to be identified.
The Central Bank told Reuters on Wednesday it may defer plans to stop supplying dollars for oil-import bills and vowed to act against currency speculation after depreciation fears pulled the rupee to an all-time low for a second day.
Trading for oil imports accounts for about $ 15 million of daily volume in Sri Lanka’s foreign exchange market, where the total daily average volume varies between $ 60 million and $ 100 million, according to Central Bank officials.
The Central Bank now partially meets dollar requirements to pay oil bills, but if it stops next month, that would force the State-owned Ceylon Petroleum Corporation to buy dollars from the currency market, adding to the pressure on the rupee.
The Central Bank on Tuesday warned against currency speculation, saying the depreciation was unwarranted, but demand from importers still drags the rupee lower, say traders.
Monetary authorities said on Friday they expected inflows of $ 574 million over the next month but the market shrugged that off amid concern the inflow would not support the rupee with the Central Bank buying dollars.
The rupee has depreciated 13.3 per cent since the Central Bank stopped intervening to defend a specific price on 9 February and 16.3 per cent from 21 November, when the Government allowed a three per cent devaluation.
Sri Lanka’s stock market fell 0.03 per cent, or 1.52 points to 5,440.01 in thin trade. It was the fourth fall in a row amid uncertainty over the rupee’s depreciation, rising interest rates and slowing economic growth.
The day’s turnover was Rs. 312 million ($ 2.36 million), well below this year’s daily average of Rs. 1.2 billion.
The market saw a foreign outflow of Rs. 19.8 million, but this year, foreign investors have been net buyers of Rs. 21.3 billion.
The Colombo Bourse is one of the worst performing Asian markets this year, losing 10.4 per cent.
http://www.ft.lk/2012/04/26/rupee-on-a-yo-yo/

RIO · 3 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 7:38 am

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Answer to your Caption....

The Day Cabba Goes home........ pig

The Day PB goes home..................... alien

The Day Mr. 10% goes home....................... Twisted Evil

The Day MR goes home.................................................. Rolling Eyes

The Day GOVT goes home................................. affraid

......

The Rupee will stop Depreciating & yes the CSE will also stop reverse trend..... cheers

GOOD LUCK till then.... Very Happy

Rajaraam · 4 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 8:30 am

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I think the issue is more than the depreciation it's fluctuation in a wider range. Early April it was around 125 and now 133. Fluctuation within 3 weeks is too high. Isn't it?

worthiness · 5 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 9:01 am

worthiness

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Volatility of exchange rate in next two weeks may hint the future trend of currency. If it comes at uncontrollable point authorities should take stern action which brings them adverse effects in political arena.
This is the outcome of gaining political advantages pawning the long term outlook of economy. Priority should be given to long term vision of the economy rather tackling the issues on ad hoc basis. We have noticed that many policy decisions made at high level are reversed within few days. This is a bad signal to the nation proving ineffective, inefficient administration system.

sureshot · 6 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:01 am

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US $ WILL DIP ONLY FOR THE NEXT SUNAMI...........
Very Happy

rijayasooriya · 7 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:07 am

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RIO wrote:Answer to your Caption....

The Day Cabba Goes home........

The Day PB goes home.....................

The Day Mr. 10% goes home.......................

The Day MR goes home..................................................

The Day GOVT goes home................................. ......

The Rupee will stop Depreciating & yes the CSE will also stop reverse trend.....

GOOD LUCK till then....

After everyone goes who will come Laughing

Redbulls · 8 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:11 am

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$ will strength after finishing bringing back the money which took out of the country by super powers in the past, in a form of investment.(To be used in forth coming Elect...)
(Two types of gain they'll have one: Interest earned in the foreign soil Second More SL Rupee)
All of us know how they got the money.(10%,bla bla....)
These are happening for the last 50 years by country's super powers.
We idiots are voting,electing them and plus paying santhosam.

manula · 9 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:13 am

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worthiness wrote:Volatility of exchange rate in next two weeks may hint the future trend of currency. If it comes at uncontrollable point authorities should take stern action which brings them adverse effects in political arena.
This is the outcome of gaining political advantages pawning the long term outlook of economy. Priority should be given to long term vision of the economy rather tackling the issues on ad hoc basis. We have noticed that many policy decisions made at high level are reversed within few days. This is a bad signal to the nation proving ineffective, inefficient administration system.

good ...these type of changing policy decision will have effect in the forign investment also... there is no long term vision... when required money/comission selling some thing/increasing tax or etc....

Redbulls · 10 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:31 am

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Read this

Cabraal-missile more vicious than Agni-V: Ranil
WEDNESDAY, 25 APRIL 2012 19:30
Opposition United National Party (deleted) Leader Ranil Wickremesinghe said yesterday the sky-rocketing cost of living in Sri Lanka was far more destructive and forceful than the Indian missile that was launched last week.

Mr. Wickremesinghe said most people believed that the Indian-produced Agni-V missile could be a threat to neighbouring nations including China. However he said with the increase in the price of fuel, electricity, food items and transport there was nothing that was shooting higher than the cost of living in Sri Lanka.

Mr. Wickremesinghe said Central Bank Chief Ajith Nivard Cabraal was responsible for the rising prices and the downward spiral of the economy and pointed out that the government had not taken any action to rectify these issues.

“People should be more concerned about the Cabraal-missile than the Agni-missile. The people have suffered because of it and we are asking the government to increase wages,” he said adding that the rising cost of living will be the slogan for the deleted May Day rally in Jaffna.

“The rising cost of living has affected everyone irrespective of their race or religion. It’s the government duty to address these issues and while doing so to also address national issues,” Mr. Wickremesinghe said and stressed the need to protect and strengthen democracy, media freedom, and people’s rights.

He expressed these views when Electoral and District organisers were appointed at a party event at Sirikotha.

Former deleted Deputy Leader Karu Jayasuriya and attorney-at-law Sujeewa Senasinghe’s were not present though their names were also called out. deleted Deputy Leader Sajith Premadasa was also not present. (Olindhi Jayasundere)
http://www.dailymirror.lk/news/18207-cabraal-missile-more-vicious-than-agni-v-ranil.html

manula · 11 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:59 am

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Redbulls wrote:$ will strength after finishing bringing back the money which took out of the country by super powers in the past, in a form of investment.(To be used in forth coming Elect...)
(Two types of gain they'll have one: Interest earned in the foreign soil Second More SL Rupee)
All of us know how they got the money.(10%,bla bla....)
These are happening for the last 50 years by country's super powers.
We idiots are voting,electing them and plus paying santhosam.

@Red bull.. who will bring back money... it will be in safe in swiss accounts for ever and new more accounts are strating ..taking black money out from SL.. only $ we are getting from our hard working forign workers saving only.. but from this ide according to $ rate government has to pay more for exports/loans.. etc...

These are happening for the last 50 years by country's super powers.
We idiots are voting,electing them and plus paying santhosam -- this is i am fully agree with you..

Backstage · 12 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 11:37 am

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Stand Off 1 Comment(s)
26 Apr, 2012 10:47:48
Sri Lanka forex markets inactive
Apr 26, 2012 (LBO) - There were no deals in Sri Lanka's forex markets Thursday and quotes have also dried up pending a meeting of bank Treasurers with the Central Bank, market participants said.
Bank Treasurers are expected to meet the regulator at 11.30 am and the market is expected to start later.

At open there were isolated quotes ranging from 131.50/132.50 and 130.20/131.20 to the US dollar but they dried up later, dealers said.

The rupee fell to a record low of 133.50 to the US dollar Wednesday before recovering to close at 131.65/132.00 levels following sales by a state bank.

Central Bank Governor Nivard Cabraal said Wednesday that some speculative deals were being probed.

Sri Lanka's rupee has come under pressure from high credit growth.

Monetary policy also loosened in April due to seasonal deficit financing, which has tended to put pressure on the dollar peg even in past years.

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READER COMMENT(S)
1. Sirinie Apr 26
"Monetary policy also loosened in April due to seasonal deficit financing"

This is not monetary policy, but monetary conditions. In fact monetary policy has tightened substantially over the past three months with central bank raising policy rates twice and imposing a credit ceiling.

http://www.lankabusinessonline.com/fullstory.php?nid=1731919629

UKboy · 13 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 11:51 am

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Dont worry guys more n more $ bonds are on the way.. We always prefer temporary solutions ne. Laughing

shaankh · 14 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 12:44 pm

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sriranga wrote:Rupee recovers on CB intervention of $ 5 m
Depreciation fears remain; markets shrugs off bank comments
CB prevents further rupee fall by moral suasion
Bourse slips for the fourth straight session
Reuters: The rupee fell 1.05 per cent to a record low of 133.50 to the dollar on Wednesday on importer demand for the US currency because of concern the rupee will weaken further if the Central Bank stops supplying dollars for oil bills.
But the rupee ended at 131.65/132.00 against the dollar, firmer than Tuesday’s close of 132.00/20 after the Central Bank intervened via moral suasion and selling $ 5 million dollars, dealers said.
At least three dealers Reuters spoke to said the lowest intraday trade was done at 133.50.
“There was heavy selling by a state bank and heavy moral suasion by the Central Bank,” said one of the currency dealers, who declined to be identified.
The Central Bank told Reuters on Wednesday it may defer plans to stop supplying dollars for oil-import bills and vowed to act against currency speculation after depreciation fears pulled the rupee to an all-time low for a second day.
Trading for oil imports accounts for about $ 15 million of daily volume in Sri Lanka’s foreign exchange market, where the total daily average volume varies between $ 60 million and $ 100 million, according to Central Bank officials.
The Central Bank now partially meets dollar requirements to pay oil bills, but if it stops next month, that would force the State-owned Ceylon Petroleum Corporation to buy dollars from the currency market, adding to the pressure on the rupee.
The Central Bank on Tuesday warned against currency speculation, saying the depreciation was unwarranted, but demand from importers still drags the rupee lower, say traders.
Monetary authorities said on Friday they expected inflows of $ 574 million over the next month but the market shrugged that off amid concern the inflow would not support the rupee with the Central Bank buying dollars.
The rupee has depreciated 13.3 per cent since the Central Bank stopped intervening to defend a specific price on 9 February and 16.3 per cent from 21 November, when the Government allowed a three per cent devaluation.
Sri Lanka’s stock market fell 0.03 per cent, or 1.52 points to 5,440.01 in thin trade. It was the fourth fall in a row amid uncertainty over the rupee’s depreciation, rising interest rates and slowing economic growth.
The day’s turnover was Rs. 312 million ($ 2.36 million), well below this year’s daily average of Rs. 1.2 billion.
The market saw a foreign outflow of Rs. 19.8 million, but this year, foreign investors have been net buyers of Rs. 21.3 billion.
The Colombo Bourse is one of the worst performing Asian markets this year, losing 10.4 per cent.
http://www.ft.lk/2012/04/26/rupee-on-a-yo-yo/

Moral suation is practicing by CB for about one month now and will it help further. Because desensitisation will happen since there is no much effect by those talks given by cabral. Market will not listen to those stories anymore until money comes.

UKboy · 15 $$$$$$$$ Fri Apr 27, 2012 2:34 am

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UKboy wrote:Dont worry guys more n more $ bonds are on the way.. We always prefer temporary solutions ne.

Here comes the 1st one (in 2012)..... More is on the way..
Still these are coming through government institutes.. pig

Sri Lanka's Bank of Ceylon US$500mn bond sale opens - Update

Apr 26, 2012 (LBO) - Subscriptions for a 500 million dollar bond by Sri Lanka's state-run Bank of Ceylon in international markets has opened and is attracting orders, sources familiar with the matter said.

The lender hired Bank of America, Citigroup Inc. and HSBC Holdings to sell the bond after a series of investor meetings.
Sources said orders from Asia was strong, but Sri Lanka sovereign bonds had earlier attracted strong interest from the US and similar demand is expected for the Bank of Ceylon Bond.

The bond will have a tenor of 5-years and is expected to yield a little over 7 percent.

http://www.lankabusinessonline.com/fullstory.php?nid=991537999

sriranga · 16 Re: When will be rupee depreciation stop? Mon Apr 30, 2012 2:05 am

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UKboy wrote:

UKboy wrote:Dont worry guys more n more $ bonds are on the way.. We always prefer temporary solutions ne.

Here comes the 1st one (in 2012)..... More is on the way..
Still these are coming through government institutes..

Sri Lanka's Bank of Ceylon US$500mn bond sale opens - Update

Apr 26, 2012 (LBO) - Subscriptions for a 500 million dollar bond by Sri Lanka's state-run Bank of Ceylon in international markets has opened and is attracting orders, sources familiar with the matter said.

The lender hired Bank of America, Citigroup Inc. and HSBC Holdings to sell the bond after a series of investor meetings.
Sources said orders from Asia was strong, but Sri Lanka sovereign bonds had earlier attracted strong interest from the US and similar demand is expected for the Bank of Ceylon Bond.

The bond will have a tenor of 5-years and is expected to yield a little over 7 percent.

http://www.lankabusinessonline.com/fullstory.php?nid=991537999

CB Chief urges more corporates to go for bonds after BOC’s mega success

Reuters: The Central Bank on Friday asked the country’s corporates to raise funds through bonds, after State-owned Bank of Ceylon raised $ 500 million via a benchmark five-year paper at a lower-than-expected price with high demand.

Bank of Ceylon’s bond, Sri Lanka’s largest so far, was priced at a yield of 6.875 per cent, the tight end of the 6.875-7 per cent guidance, and was oversubscribed by 7.7 times with total orders received amounting to $ 3.86 billion.

“I think more Sri Lankan corporates should go for this kind of bond issue,” Central Bank Governor Ajith Nivard Cabraal told Reuters. “This is far better price. It took five years to see the fruition of the benchmark we set in 2007.”

The price is better than Sri Lanka’s debut sovereign $ 500 million, five-year sovereign bond which was sold at 8.25 per cent in 2007 and below a 7.4 per cent yield, the price it got for a similar 2009 sovereign paper.
Although Sri Lankan corporates substantial funding, they are reluctant to go for bond issues as their requirements are much lower than a benchmark size.

“This shows there is a huge demand for Sri Lankan paper and other corporates should take this advantage,” Cabraal said.

Sri Lanka is likely to refloat its debut sovereign bond later this year.

However, Cabraal said the Central Bank had not yet decided the timing for the bond refloat.
Sri Lanka raised $ 3 billion for infrastructure projects via four sovereign bonds since 2007 and two $ 1 billion, 10-year bonds sold in 2010 and 2011.
http://www.ft.lk/2012/04/30/cb-chief-urges-more-corporates-to-go-for-bonds-after-bocs-mega-success/

econ · 17 Re: When will be rupee depreciation stop? Mon Apr 30, 2012 7:08 am

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It will stop when Central Bank independant from government.

manula · 18 Re: When will be rupee depreciation stop? Mon Apr 30, 2012 10:00 am

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econ wrote:It will stop when Central Bank independant from government.

good answer .... CB will never independant .... Very Happy

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When will be rupee depreciation stop?

1 When will be rupee depreciation stop? Thu Apr 26, 2012 1:17 am

shaankh

2 Rupee on a yo-yo! Thu Apr 26, 2012 1:24 am

sriranga

3 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 7:38 am

RIO

4 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 8:30 am

Rajaraam

5 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 9:01 am

worthiness

6 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:01 am

sureshot

7 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:07 am

rijayasooriya

8 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:11 am

Redbulls

9 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:13 am

manula

10 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:31 am

Redbulls

11 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 10:59 am

manula

12 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 11:37 am

Backstage

13 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 11:51 am

UKboy

14 Re: When will be rupee depreciation stop? Thu Apr 26, 2012 12:44 pm

shaankh

15 $$$$$$$$ Fri Apr 27, 2012 2:34 am

UKboy

16 Re: When will be rupee depreciation stop? Mon Apr 30, 2012 2:05 am

sriranga

17 Re: When will be rupee depreciation stop? Mon Apr 30, 2012 7:08 am

econ

18 Re: When will be rupee depreciation stop? Mon Apr 30, 2012 10:00 am

manula

19 Re: When will be rupee depreciation stop?

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