Foreign banks are quoting a flat rate for 214/222 for telegraphic transfers and similar rates for currency notes.
Larger private banks are quoting rates of 206.50/211.00 for small value transactions. Smaller ones are quoting rates of 210/220 for telegraphic transfer and currency notes.
State run Bank of Ceylon is quoting a rate of 198.50/203.00 for transactions below 1,000 dollars or currency notes below 100 dollars.
Peoples’ Bank is offering 202.99 for small transaction of below 500 dollars.
Though a 30-year civil war ended in 2009, monetary policy had became increasingly more activist and discretionary since 2015, with interest rates being increasingly becoming a final target in highly discretionary policy, analysts have shown.
There is no spot rate in the market, with outright trades barred above 200 to the US dollars. Forward cover is banned and this week, a price control order was slapped on dollar interest rates.
Last week the central bank raised policy rates by 50 basis points to 6.0 percent as nation-wide inflation rose to 6.8 percent.
Bond markets have also become dysfunctional as players looked for direction with longer term bonds not in demand.
On Wednesday bond moved higher after a Treasury bill auction however only 2023 and 2024 bonds were liquid in the market.
A bond maturing on 15.11.23 closed at 7.00/10 per cent on Wednesday, up from 6.95/7.05 percent on Tuesday.
A bond maturing on 01.12.24 closed at 8.00/8.10 per cent on Wednesday, steady from 8.00/8.05 percent, a day earlier. (Colombo/Aug25/2021)