Jan 21, 2008 (LBO) — Sri Lanka’s state-run Ceylon Petroleum Corporation (CPC) says it is hoping to move forex markets in its favour in 2008, armed with more than a billion dollars in suppliers’ credits. . The CPC has a credit line from Iran for seven months of imports of crude which amounts to around 700 million dollars. Of this the first four months is interest free and the balance is charged an interest rate of 0.5 percent.
CPC has also struck a one year deal with Trafigura, a petroleum trading firm, to import refined products from Singapore which also comes with 6-month suppliers’ credit priced at LIBOR plus 1.6 percent.
“That also helps us by another 500 million dollars,” says CPC chairman Ashantha de Mel. “That way we get around 1.2 billion dollars worth facility.”
CPC, as the country’s largest single importer and with large bills, ends up buying dollars in the interbank market.
“We buy around 6 to 7 million dollars every day, because that’s what we need,” says de Mel.
“The entire market has around 12 to 16 million dollars. So when we buy 7 million dollars out of that, the market tends to move.”
De Mel wants to use the petroleum credi