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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » IMF, CB numbers don’t tally!

IMF, CB numbers don’t tally!

5 posters

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1IMF, CB numbers don’t tally! Empty IMF, CB numbers don’t tally! Tue Jul 24, 2012 6:37 am

Malika1990

Malika1990
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
The cumulative figure of the funding extended via the Stand By Arrangement (SBA) as disclosed by the lender IMF and recipient Central Bank don’t tally.
Yesterday IMF’s statement put the figure as Special Drawing Rights 1.6536 billion (about $ 2.49 billion) whilst the Central Bank’s announcement on Saturday had it as SDR 1.654 billion or $ 2.548 billion. The difference was about 58 million in dollar terms.
http://www.ft.lk/2012/07/24/imf-cb-numbers-dont-tally/

2IMF, CB numbers don’t tally! Empty Re: IMF, CB numbers don’t tally! Tue Jul 24, 2012 7:24 am

Antonym

Antonym
Vice President - Equity Analytics
Vice President - Equity Analytics
Daily FT: Haven’t you guys ever heard of ’rounding off’?!
It means “to truncate the least significant digit or digits of a numeral, and adjust the remaining numeral to be as close as possible to the original number”.

3IMF, CB numbers don’t tally! Empty Re: IMF, CB numbers don’t tally! Tue Jul 24, 2012 12:16 pm

Mettasena

Mettasena
Stock Analytic
Stock Analytic
@Antonym wrote:Daily FT: Haven’t you guys ever heard of ’rounding off’?!
It means “to truncate the least significant digit or digits of a numeral, and adjust the remaining numeral to be as close as possible to the original number”.

Rounding off is fine but here it looks a big difference..nearly Rs.7 billion and SDR value doesn't tally. I just read the report at LBT it clearly defines.I think Central Bank wanted to show a bigger value than what they received

Have a look.


LinK: http://lankabusinesstoday.com/news/economic/2318-last-tranche

Rs.7.6386 Billion Figure Loss?

However according to economic analysts it is surprising to note that IMF noting it had disbursed a total of US $ 2.49 billion (SDR 1.6536 billion) and Central Bank of Sri Lanka noting that it received nearly US $ 2.548 billion (SDR 1.654 billion). Accordingly when the two statements are compared there is an error of nearly US $ 58 million (SDR 400,000) or nearly Rs. 7.6386 billion worth loss figure (calculated at US $ 1 = 131.70 average exchange rate on 20 July 2012).

Exchange Rate Difference

On the contrary when the Executive Board of the International Monetary Fund (IMF) on 24 July 2009 approved a 20-month Stand-By Arrangement for Sri Lanka it was reported to be in an amount equivalent to SDR 1.65 billion (about US$2.6 billion) to support the country's economic reform program. (go to IMF Press Release from here) Link: http://www.imf.org/external/np/sec/pr/2009/pr09266.htm

That time upon the Executive Board’s approval, an amount equivalent to SDR 206.7 million (about US$322.2 million) became immediately available to Sri Lanka.

During the period from 20 July 2009 to 26 July 2009 US $ exchange rate was at Sri Lankan Rs.115.7984 per US Dollar (data Sri Lanka Customs). And at the time (20 July 2009) the value of a Special drawing right (SDR) was nearly US $ 1.5757 (1 SDR = US $ 1.57575) and as at 20 July 2012 the value of a a Special drawing right (SDR) is nearly US $ 1.50580. It clearly defines the amount of US Dollars which could be received per SDR had dipped by 699.5 pips which in turn reflects that the value of a SDR had come down compared to US Dollar.

Special drawing rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). Not a currency, SDRs instead represent a claim to currency held by IMF member countries for which they may be exchanged.And 'Pips' relate to the smallest price movement any exchange rate can make. Because currencies are usually quoted to four decimal places

On the other hand in 24 July 2009 the average value of a US Dollar in Sri Lankan Rupees had been Rs.115.7984 and as at 20 July 2012 the average value of a US Dollar is reported to be Sri Lankan Rupees 131.7000 which in turn reflects that a cost of a US Dollar in Sri Lankan Rupees had increased by nearly 159,016 Pips within a period of 3 years.

As per analysts it reflects the effects on Sri Lanka's economic growth and US economic growth in the midst of global financial turmoil that started to emerge in late 2008.

Source : LBT.lk

4IMF, CB numbers don’t tally! Empty Re: IMF, CB numbers don’t tally! Tue Jul 24, 2012 12:55 pm

Antonym

Antonym
Vice President - Equity Analytics
Vice President - Equity Analytics
The IMF's disbursement is in SDRs.

IMF’s statement put the figure as Special Drawing Rights 1.6536 billion, whilst the Central Bank’s announcement on Saturday had it as SDR 1.654 billion.

To me, it looks like a simple case of 2 different persons applying different exchange rates to convert SDRs to USD... Let's not create conspiracy theories just for the sake of controversy!

5IMF, CB numbers don’t tally! Empty Re: IMF, CB numbers don’t tally! Tue Jul 24, 2012 1:36 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

Yes, when there is clear documentation how much IMF gave this is not a matter to be concerned too much about right now. It could be a rounding off thing as Antonym said or exchange rate issue or simply a statement made without too much foresight.
If one is really trying to claim we received more than IMF gave, at some point these have to be accounted for if we want to go ahead with IMF loans again. Quite frankly I would b e more concerned about if CB said we received less than IMF gave than saying we received more ;-)

6IMF, CB numbers don’t tally! Empty Re: IMF, CB numbers don’t tally! Tue Jul 24, 2012 6:40 pm

Whitebull


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Anyway it is better not to round off numbers in this type of situations.

7IMF, CB numbers don’t tally! Empty Re: IMF, CB numbers don’t tally! Wed Jul 25, 2012 1:34 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
Below link should calrify and support what I mentioned in the below comment
http://forum.srilankaequity.com/t20512-imf-clarifies-numbers

@slstock wrote:
Yes, when there is clear documentation how much IMF gave this is not a matter to be concerned too much about right now. It could be a rounding off thing as Antonym said or exchange rate issue or simply a statement made without too much foresight.
If one is really trying to claim we received more than IMF gave, at some point these have to be accounted for if we want to go ahead with IMF loans again. Quite frankly I would b e more concerned about if CB said we received less than IMF gave than saying we received more ;-)

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