Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post

Latest topics

» ඉන්ධන මිල සූත්‍රය මෙන්න
by ruwan326 Yesterday at 7:34 pm

» Daily Foreign Transactions
by ruwan326 Yesterday at 7:29 pm

» Daily Stock Market Update
by Insights Equity Yesterday at 5:53 pm

» Dreams of big profits as marijuana becomes legal in Canada
by janith123 Yesterday at 3:07 pm

» MARKET CRASH - GUARANTEED
by Maharaja Yesterday at 1:57 pm

» $ 1 b from China Development Bank in Sri Lanka today
by ruwan326 Yesterday at 10:20 am

» US Share Market Crash Seems to Good for Sri Lankan/Asian Share Market and Currencies
by Yahapalanaya Yesterday at 9:59 am

» Banking sector profits seen losing steam ahead of 3Q earnings season
by Yahapalanaya Yesterday at 9:50 am

» Dr. Ali Gulamhusein resigns from People’s Leasing board, amid litigation/floundering listed companies
by ruwan326 Yesterday at 7:24 am

» Sri Lanka to revoke rogue bikini ban
by ruwan326 Yesterday at 6:58 am

» ORIENT FINANCE PLC - RATING REVIEW
by ruwan326 Wed Oct 17, 2018 8:43 pm

» CSE WEEKLY
by ruwan326 Wed Oct 17, 2018 8:38 pm

» EPF needs governance overhaul to invest in Sri Lanka stock market
by janith123 Wed Oct 17, 2018 4:58 pm

» MD behave like ANIMAL
by janith123 Tue Oct 16, 2018 4:48 pm

» Sri Lanka may be one of few countries who takes ridiculous tax
by soileconomy Tue Oct 16, 2018 7:50 am

» ALHP WILL MOVE UP SOON
by ruwan326 Tue Oct 16, 2018 7:27 am

» Stock Broker Companies for sale
by janith123 Mon Oct 15, 2018 9:26 pm

» Fresh push to woo UK investors to SL
by ruwan326 Mon Oct 15, 2018 8:03 pm

» Central Bank will intervene if rupee moves on speculation – official
by Yahapalanaya Mon Oct 15, 2018 6:18 pm

» FUTURE WINNING STOCKS AT BOTTOM LEVEL
by Yahapalanaya Mon Oct 15, 2018 6:15 pm

» Nimal returns to stock market
by sapumal Mon Oct 15, 2018 4:53 pm

» Stock price decline leaves John Keells (JKH) vulnerable to a takeover by Sri Lanka’s oligarchs
by ruwan326 Mon Oct 15, 2018 8:08 am

» අනං## මනං ##
by ruwan326 Sat Oct 13, 2018 9:45 pm

» Weekly Stock Market Roundup
by Insights Equity Fri Oct 12, 2018 8:55 pm

» Dealing by directors
by ruwan326 Fri Oct 12, 2018 8:08 pm

» Summary of Key Announcements during the week
by ruwan326 Fri Oct 12, 2018 8:06 pm

» Arjun Alosius and Mano Thittawella
by janith123 Fri Oct 12, 2018 5:29 pm

» Global stock markets plunging, Sri Lanka’s CSE takes no notice - 11 October 2018
by EquityChamp Fri Oct 12, 2018 2:24 pm

» Stock Market Cartoons
by ruwan326 Fri Oct 12, 2018 1:42 pm

» HOW TO STABILIZE RUPEE
by EquityChamp Thu Oct 11, 2018 10:26 pm

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Talk » Mahinda:Govt task is to manage Crises & not complain Trump strengthen US Economy

Mahinda:Govt task is to manage Crises & not complain Trump strengthen US Economy

Go down  Message [Page 1 of 1]

DS Wijesinghe


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
ECONOMYNEXT - Sri Lanka's ex-President Mahinda Rajapaksa blamed freer trade under Sri Lanka's current administration and praised President Donald Trump's protectionist policies as the island's soft-peg with the US dollar came under pressure from contradictory monetary and exchange policies.


"President Trump has strengthened the US economy through a policy of giving incentives to indigenous businesses and imposing tariffs on imports to encourage local production," Rajapaksa said in a statement.
"My government also had a policy of producing whatever we could locally and reducing imports particularly of foodstuffs such as diary products, maize, soya, sugar, onion, potato, fruits, vegetables, poultry and certain industrial products.
"This government in contrast believes in limitless liberalization and free trade without a clear strategy to increase exports and reduce imports.
"The role of a government is to keep abreast of worldwide developments and to take steps to strengthen our economy instead of complaining that a foreign leader has strengthened his own economy and that our currency was collapsing on that account."
The US however also has a current account deficit and one of the largest trade deficit of the world, but its central bank has a free floating exchange based on a domestic anchor.
Sri Lanka on the other had is operating a peg to collect reserves, unwind or give central bank swaps to domestic players and is also chasing a domestic anchor in the form of a wide inflation target with a 'flexible exchange' rate.
The conflicting policies trigger a loss of credibility in the rupee, periodically.
As a result every time domestic credit picks up, and the central bank tries to cut rates or even maintain existing rates, by injecting cash in to money markets, the rupee falls.
The currencies of East Asian nations that operate soft-pegs including Vietnam, one of the fastest growing exporting nations - with free trade - is now under pressure. During the global financial crisis, the Vietnam Dong fell from 16,000 to 22,000 to the US dollar.
However the Sri Lanka rupee fell from around 110 to 120 during the crisis and for the first time the rupee was allowed to appreciate as credit contracted by Central Bank Governor Nivard Cabraal.
"The Sri Lankan Rupee which averaged Rs.110.62 to the US Dollar in 2007 was still Rs.114.94 in 2009 after the crisis had run its course," Rajapaksa said.
"The government’s task is to manage crises, not to complain about them."
The rupee fell to 130 to the US dollar in a 2011/2012 balance of payments crisis as the central bank cut rates and injected money while a drought boosted credit funded losses at state energy enterprises amid a booming credit and stock market.
The current administration in 2015 also cut rates in April as the credit cycle recovered from the 2011/2012 crisis and accommodated spending with term repo releases and outright purchases of Treasury bills.
The rupee has fallen from around 131 from 2015. In 2018, as credit recovered the rupee has against started to all, due to liquidity injections. In the current panic the rupee is down to 169.50 to the US dollar.
Analysts had urged reforms of the central bank saying operating an inconsistent peg would hit any free trade agenda for the people.
Ex-president Rajapaksa also warned that prices of good including fuel will go up due to the fall in the rupee. (Colombo/Sept25/2018)
https://economynext.com/Sri_Lanka_ex_President_blames_free_trade_for_rupee_fall,_praises_Trump-3-12002-1.html

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum