Rupee continues to depreciate against the US Dollar

Colombo (News1st) - The Rupee depreciated further against the dollar today. According to the Central Bank, the selling price of the US dollar was recorded at Rs. 171.42. At the start of the year, the US Dollar sold at Rs. 153. While there has been a drastic decrease in the rupee in recent weeks, the Central Bank has had to resort releasing foreign reserves to sustain the value of the rupee. The Central bank last week revealed they had taken steps to release a sum of Rs. 184 million for this purpose. While the government has taken steps to release money in this manner, they also took steps to suspend the treasury bill issuance which was scheduled for yesterday. The government issues treasury bills to cover daily expenses including government sector salaries and fuel costs. These are issued carrying time stamps of 3 months, 6 months and one year. The government attempted to raise Rs 6 billion rupees through the issuance of treasury bills yesterday. They intended to raise Rs 2 billion on a 3-month basis and another Rs 4 billion on a one-year basis. However, as the interest rates of the bids presented exceeded the levels expected by the Central Bank, they decided not to raise the proposed 6000 million. However bids worth Rs. 13,922 were received during this auction to raise 6000 million. When the Central Bank last issued bonds, it was at an interest rate of 8.56% for 3 months and 9.051% for those carrying a validity of a year. AN EXAMPLE FOR SRI LANKA Despite the unfavorable global economic situation, Vietnam’s economy maintained its growth momentum and recorded significant achievements in the first three quarters of the year. It is notable that the quality of growth has improved and the growth model is shifting from extensive to intensive. According to Department of National Economic Issues under the Ministry of Planning and Investment, with the socio-economic development figures in the first nine months of the year, it is projected that all of the 12 criteria set by the National Assembly will be fulfilled, with eight expected to exceed the targets, thereby helping to realize the five-year socio-economic targets. The GDP growth for 2018 could reach 6.7%, or even higher if more efforts are made in the final months of the year. Data from the General Statistics Office (GSO) show that the Vietnamese economy grew by 6.98% in the January-September period, the highest growth rate in the past eight years. The manufacturing sector continued to be a bright spot and the main driver of growth, expanding by 12.65% during the period. The services sector grew by 6.98%, which was lower than the previous year but higher than the average during the 2012-2016 period. Exports in the first nine months of the year reached nearly US$179 billion, up 15.4%, with 26 goods bringing in over US$1 billion each. The notable feature of the economy in the last nine months is that high growth was maintained and the quality of growth was improved. About a quarter of Vietnam’s total trade is with China, which is facing potential tariffs on all of its exports to the U.S. in an escalating trade war with President Donald Trump but Vietnam is successfully facing the challenge by managing their financial policies, foreign exchange rates, interest rates and inflation by attracting small-scale projects which are deviating from China due to the US Trade Policy.