US Dollar in unknown territory
View(s):The US dollar has entered unchartered waters with money market experts unable to predict at what levels it would reach by December when import demand rises owing to Christmas and New Year demand for goods.
This week the dollar hit a high of Rs. 163 and calmed down to a trading level of Rs. 161.80-161.90 on Friday.
“No one knows where the dollar is heading and at what level since the Central Bank has stopped intervening in the market,” one dealer said.
Import demand has triggered a renewed thirst for dollars while export values, in line with the practice for many years, was less than half that of import values.
According to the Central Bank’s latest economic data, even though the lowest trade deficit so far during the year in absolute terms was recorded in the month of June, the trade deficit widened significantly in comparison to June 2017 as the growth in import expenditure outpaced the increase in export earnings.
It said the Sri Lankan rupee depreciated by 3.4 per cent against the US dollar by end June 2018 and by 5 per cent during the year up to August 27, 2018.