முகாமைப் படுத்தப்படும் சிறிலங்கா பணமாற்று விகிதம் முடிவுக்கு வரும்

[narathar]

முகாமைப் படுத்தப்படும் சிறிலங்கா பணமாற்று விகிதம் முடிவுக்கு வரும்.

சர்வதேச நாணய நிதியத்தின் நெருக்குதலுக்கு அமைய முகாமைத்துவப் படுத்தபட்டிருக்கும் சிறிலங்காவின் பண மாற்று விகிதம் சந்தை நிலவரப் படி மாற்றப்பட உள்ளது.இது நிகழ்ந்தால் சிறிலங்கா ரூபாயின் பெறுமதி இன்னும் கீழே செல்லும்.

Sri Lanka to withdraw 'exchange control' measure in March

January 03, 2007 (LBO) – Sri Lanka will withdraw from March 31, a controversial cash deposit requirement aimed at limiting imports, which drew censure from the International Monetary Fund as an exchange control measure, a top official said.

A 50 percent margin requirement was imposed on a set of goods defined as 'luxury' by bureaucrats in October last year, as the Sri Lanka rupee came under heavy pressure from excessive money printing by the Central Bank.

Central Bank Governor Nivard Cabraal said this week in the course of issuing a statement on monetary policy direction for 2007, that the imposition of the 50 percent margin requirement was achieving its 'desired results'.

"If this trend continues and the desired outcome is achieved, this measure will be withdrawn by 31st March 2007," Cabraal said.

On Notice

The International Monetary Fund gave Sri Lanka until November 2007, or the next Article IV consultations - whichever comes earlier - to remove the margin requirement, which it ruled as a violation of Sri Lanka's obligations under agreements signed with the Fund.

"Sri Lanka maintains requirements that importers of certain goods deposit margin with commercial banks that give rise to an exchange restriction inconsistent with Article VIII, Section 2(a) of the Fund’s Articles," the IMF said in its annual Article IV consultation report released which was finally released in December after a long delay.

"On November 9, 2006, the Fund approved the retention of the exchange restriction until November 2, 2007 or the completion of the next Article IV consultation with Sri Lanka, whichever comes earlier," the report said.

Many badly managed countries that have high budged deficits and print money, severely undermining their national currency in the process, then try to prop it up with exchange controls.

In the 1970's Sri Lanka's economy was shackled with a set of tight exchange controls, which were dismantled after the economy was opened in 1978, with a step devaluation of the rupee.

Roller Coaster

In January 2001, Sri Lanka floated the rupee as part of a Fund assisted bailout of a balance of payments crisis brought about by a fiscal deficit nearing 10 percent of GDP and heavy money printing in the previous year as the country ran down its reserves to two months of imports.

In April 2004, Sri Lanka jettisoned a Fund-assisted recovery package and went on another money printing binge and turned a 500 million dollar balance of payments surplus into a 200 million deficit.

In January 2005, tsunami aid and an IMF emergency package pushed the rupee up.

The rupee again came under pressure from the end of the second quarter of 2006, as money printing again destabilized the economy from April onwards, and Sri Lanka's reserves are now estimated by the IMF to be down to 2.2 months of projected imports.

The Central Bank has spent around 400 million dollars in 2006 to defend the rupee which has so far fallen from about 102 to 108 to the US dollar, and IMF said the rupee was no longer 'free floating'.

"Based on developments in the past three years, the exchange rate regime in Sri Lanka has been reclassified under the Fund system as managed float since June 2006," IMF said in December.

Though Sri Lanka's real interest rates are still negative, the Central Bank has showed renewed resolve to end loose monetary policy since December 2006.

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