FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ 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
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ 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
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

LISTED COMPANIES

Submit Post



Poll

Can there be another Covid-19 wave in Sri Lanka?

 
 
 

View results

STOCK MARKET TRAINING
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



Latest topics

» BROWNS INVESTMENTS PLC (BIL.N0000)
by MoneyLover Today at 7:16 pm

» What is "Introductions" in Upcoming listing in CSE?
by Nandun Today at 1:46 pm

» Glove stocks fall after Top Glove posts weaker 4Q results
by ResearchMan Today at 1:37 pm

» KOTAGALA PLANTATION
by stockchaser Today at 8:03 am

» The stock market can be a great place to make money; it can also be a great place to lose money. Stock market for beginners
by Economatta Today at 6:16 am

» LOFC AND CLC Target Price??
by Captain Yesterday at 9:17 pm

» Top Foreign Trading today
by SAGA Yesterday at 6:32 pm

» Top crossings today
by SAGA Yesterday at 5:01 pm

» EXPOLANKA HOLDINGS PLC (EXPO.N0000)
by Sunimal Yesterday at 12:52 pm

» Amana Takaful ATL & ATLL
by kanishkaecomm Yesterday at 12:17 pm

» Best Time to Collect Cic X
by Value Pick Yesterday at 8:15 am

» Why is First Capital Holdings being dumped?
by Berryfund Yesterday at 6:29 am

» AGST can move
by Zayden River Thu Sep 16, 2021 11:58 pm

» COMMERCIAL CREDIT AND FINANCE PLC (COCR.N0000)
by newone Thu Sep 16, 2021 11:57 pm

» AGSTAR PLC (AGST.N0000)
by Zayden River Thu Sep 16, 2021 11:57 pm

» RAIGAM WAYAMBA SALTERNS PLC (RWSL.N0000)
by Bakkabwoi Thu Sep 16, 2021 8:10 pm

» Twitter accounts related to the stock market
by Bakkabwoi Thu Sep 16, 2021 8:09 pm

» TOKYO CEMENT COMPANY (LANKA) PLC
by xhunter Thu Sep 16, 2021 7:55 pm

» LOFC LOFC LOFC
by madukp Thu Sep 16, 2021 6:49 pm

» How Equity Emerged the Top Asset Class During a Pandemic
by samaritan Thu Sep 16, 2021 6:30 pm

EXPERT CHRONICLE™

MARKET CHAT


CHRONICLE™ ANALYTICS


ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

LATEST TWEETS

You are not connected. Please login or register

FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Sri Lanka records BOP surplus of US$2.05bn in 2017

Sri Lanka records BOP surplus of US$2.05bn in 2017

Go down  Message [Page 1 of 1]

DS Wijesinghe


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
ECONOMYNEXT  - Sri Lanka has recorded a balance of payments surplus of 2,068 million dollars as capital flight reserved and domestic credit slowed, and the central bank sterilized dollar purchases, reversing money printing in 2015 and 2016.

The central bank printed money in 2015, cutting rates and pouring liquidity into money markets, as a budget deficit and domestic credit surged triggering a balance of payments crises and capital flight.

Sri Lanka exported 11.3 billion dollars of exports, up 10.2 percent from a year earlier, and imports went up 9.4 percent to 20.9 billion dollars, expanding the trade deficit to 9.6 billion US dollars from 8.8 billion dollars.

Remittances were down 1.1 percent to 7.14 billion rupees and tourism receipts were estimated at 3.6 billion US dollars. Remittances (which are not save in in forex accounts) and tourism receipts, when spent by their recipients generate a trade deficit.

Software exports will also drive the trade deficit when spent by their recipients.

Gross inflows to the government from foreign loans amounted to 5.7 billion US dollars, up from 4.9 billion US dollars including inflows to rupee Treasury bill markets from abroad.

The net inflows to government, when spent, generates a current account deficit. Sri Lanka Development Bonds, sold to forex account holders will also expand the current account when spent by the government, generating imports.

However any loan repayments abroad, and central bank foreign reserve collections will stop expanding the trade or current account deficit.

Any increases in exports when spent will drive total imports up, though they will not expand either the merchandise trade deficit or current account. 

The central bank has said it bought about 1.6 billion US dollars from the forex markets, mopping up liquidity from dollar purchase in 2017.

The central bank had also received 419 million dollars from the IMF on a gross basis. Foreign reserves are also boosted by interest earnings on reserves.

A 'BOP surplus' is not really surplus as such but the funds are invested by the central bank in US Treasuries or similar securities and are no longer in the country. But based on standard economic accounting such 'below the line' flows are not considered 'capital outflows'.

In the same manner a 'BPO deficit' also implies capital inflows as a central bank sells its foreign securities to generate dollars to intervene in forex markets when money printed by its domestic operations department turns in to imports. Under a fiat money standard, the BOP is always in balance and there is no surplus or deficit.

The 'BOP surplus' is an archaic terms dating back to the gold standard. 

Under a gold-linked standard, a central bank (or a collection of free banks or ordinary savers who do not have bank accounts) holds rising gold reserves (savings) as a domestic asset, when credit and consumption slows, not a foreign asset. As s result a 'BOP surplus' represents an inflow of gold.

Trade balances, current account balances and a BOP surplus or deficit are therefore a function of savings behaviour. (Colombo/Feb2/2018 - Update)

Back to top  Message [Page 1 of 1]

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