The market is not on the selling side because it feels that there is room for the ER to weaken and not to strengthen, they said. However, selling US dollars by CB from its foreign reserves is on the condition that demand is as per banks' net open positions and the submission of import documents.
It's controlled selling by CB, they said. Nevertheless, volumes are thin, the sources said. It will continue like this till elections are over, they said.
Once there is policy direction, by whichever government is in power, that will take the market up from the current abyss it has fallen in to, sources said.
Courtesy: Ceylon Financial Times 5 July