Notable
US has complex problems ranging from fiscal to monetary, and any disruption to America tends to have ripple effects
The buffer is not foreign reserves as the IMF and macroeconomists imagine, it is the interest rate
Sri Lanka has to de-risk the economy from inflationism to maintain stability
Sri Lanka flexible exchange rate gives profits to banks, losses to a nation
More closely the single policy rate is targeted the, the bigger the crisis Sri Lanka will have
Sri Lanka is facing external and domestic monetary headwinds in 2026
Every time the US engaged in bad policy Sri Lanka was hit
Sri Lanka should impose counterparty limits to liquidity tools and charge a premium
central bank essentially earns money to pay salaries essentially from seigniorage
A positive inflation target denies private sector productivity gains to the poor
At the moment the central bank is providing monetary stability seen in the exchange rate and inflation
Before the Second Amendment IMF could
Tax slabs should keep pace with inflation, dependent allowances should be considered
Deficits do not rise much in the year that a currency crisis is triggered, but in the stabilization year
Targeting GDP with easy money dates back to Scottish Mercantilist John Law and fully flexible policy to James Steuart.
High direct tax rates, capital consumption taxes, are not a substitute for monetary stability
| Latest | Last | |
|---|---|---|
| US Dollar | 331.7485 | 330.8514 |
| UK Pound | 443.7468 | 438.3450 |
| Euro | 372.5204 | 371.0168 |
| Yen | 2.0969 | 2.0916 |
| Aus Dollar | 233.0533 | 231.1659 |
| Latest | Last | |
|---|---|---|
| Indian Rupee | 3.4948 | 3.4202 |
| Korean Won | 0.2499 | 0.2479 |
| Oman Rial | 861.6397 | 859.3320 |
| Saudi Riyal | 88.4403 | 88.0955 |
| UAE Dirham | 90.3209 | 90.0766 |
| pts | % | |
|---|---|---|
| S&P SL20 | 5,656.91 | -0.43% |
| CSE All Share | 19,927.30 | -0.28% |
| Turnover Rs | 1457.79 million | 1193.67 million |
| Latest | Last | |
|---|---|---|
| 3-m bill | 7.61 | 7.84 |
| 6-m bill | 7.91 | 8.26 |
| 12-m bill | 8.23 | 8.3 |
| 3-yr bond | 9.24 | 9.25 |
| 5-yr bond | 9.82 | 9.56 |
| 8-yr bond | 10.50 | 10.48 |
| today | yesterday | |
|---|---|---|
| Overnight Money | 7.70 | 7.69 |
| Gilt Repo | 7.74 | 7.72 |
| I-m SLIBOR | - | - |
Countries where inflationists cannot engage in macro-economic policy with money printing have low debt
It is a shame that country with a 20-pct savings rate cannot maintain reserves and has to depreciate the currency
If parliament rubber stamps a 4-6-pct inflation target, a second default is more certain
The new central bank goal and objective are a personification of the impossible trinity of monetary policy objectives
Reserves can be collected by impoverishing the poor, or by taking in their savings
Sri Lanka rupee appreciation explained
Mass sovereign default episode in the 1980s also followed a decade of bad money from the Fed
Converted budget support loans and conflicting PCs can lead to new external instability, discredit and derail reforms
The new law appears to have brought back policy conflicts dropped in a previous amendment
The inclusion of extensive macro-prudential laws is an admission that money is bad
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