Firms hire corporate spies to get necessary dollars
Sri Lanka’s foreign exchange crisis has come to such a head that companies have resorted to employing banking espionage tactics to source scarce US dollars in the market.
Some large manufacturing companies have hired employees to find out which banks have dollars that are required by these companies for that day/week transactions and approach them as soon as possible. “Basically, we have employed a permanent ‘pusher’ who does the spy work for us finding out which bank has how many dollars at what time so that we can get that bank to allocate US dollars for our company,” a CEO of a large manufacturing company told the Business Times. Another company director confirmed this noting that his company gets to jump the ‘dollar’ queue this way. “Those with the information and corporate intelligence win.”
An analyst pointed out that this is similar to the 1970s when there were ‘pushers’ who sourced licences for companies from the government at the time.
Sri Lanka’s foreign exchange crisis has exacerbated over the past few months with the country struggling for dollars, jolted by inflation, whilst the banking sector is plainly alarmed about the future. This was precipitated by the country’s foreign exchange reserves taking a bad hit owing to the COVID-19 pandemic and the local currency coming under intense pressure and falling to a record low.
“We just don’t have enough dollars, period,” a senior banker told the Business Times noting that the country needs comprehensive and consistent, long-term solutions to address the foreign exchange cash flow issue.
Meanwhile, publicly listed multinational companies on the local stock exchange are waiting in line impatiently to repatriate profits from their IIA (inward investment accounts), bankers said. “They have complained to the Central Bank and the capital market regulator, the Securities and Exchange Commission about banks delaying repatriations,” a second banker said. Physically there are no dollars, he added. “We only have a limited amount which we can use for a day. Many need to stay in line and banks are deciding what and whom to give dollars to.”
Some importers said that their banks are unable to meet the importer’s letters of credit (LCs) and urged the importers to find US dollar sources from other banks.
Sri Lanka is due to receive a loan of US$250 million from Bangladesh, expected to come through next month while aiming to further borrow from India.