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Mon, 01 September 2014 20:13:23
Sri Lanka relaxes forward forex curbs, bank open positions
02 Jan, 2013 12:53:37
Jan 02, 2013 (LBO) - Sri Lanka has relaxed curbs on foreign exchange forward deals introduced last year and widened the net open positions for banks with effect from today, Central Bank Governor Nivard Cabraal said.
Selected derivative products will also be allowed to be developed within broad guidelines to be issued in 2013 Cabraal said delivering a monetary policy road map for 2013.

The Central Bank slapped trading curbs on banks during a balance of payments crisis last year.

Narrowing open forex positions of banks increase volatility in exchange rates as banks cannot carry over substantially forex holding overnight, reducing the depth of the market.

Cabraal said Sri Lanka was estimated to have posted a 100 million dollar surplus in the balance of payments in 2012 and 6.5 percent gross domestic product growth.
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READER COMMENT(S)
2. Seberet Jan 04
The right way to go....if you want the country to develop, it needs to be unshackled. Markets must be given the freedom to develop new products. Of course, CB surveillance must be stronger
1. Nicole Phillips Jan 04
After the hedging fiasco... do we really want to get involved in derivative?

There were lessons to be learnt from the Barings bank collapse...