The forex crisis is building up with no foreseeable solution. Banks are grappling with a situation of ‘whom to serve’ with foreign investors in the stock market demanding to take their money out, parents rushing to get additional approval to send cash to their children studying abroad and many importers demanding their needs be met. Senior officials of many banks have stated that the situation is worse than three weeks ago and continues to aggravate with their pipeline in servicing customers building up.
Foreign investors leaving the Colombo stock market are trying to take their money out with great difficulty, according to most custodian banks. The Securities and Exchange Commission has got complaints from some foreign investors over delays in sending money out. Similarly, parents with children studying overseas need to get approvals from the Central Bank and the Treasury to send cash to their children.
The two bigger state banks seem to have the situation under control with their reserves and a few have got funding lines from overseas which they have used to service the letters of credit and other forex needs. But most banks have something like 70 per cent outflows against their
30 percent inflows through remittances etc. according to one banker, the Central bank has completely ‘washed their hands off’ the situation. Some customers who could not be serviced on time, has even shifted to other larger banks. Some banks even suffer from a negative position on the import service pipeline.
However, he bigger banks however said that the situation is not as bad as it was three weeks ago. A senior official from a larger bank stated that the issue is now under control than before and it is only a matter of deciding for whom to prioritize when providing their service. Analysts predict the situation will turn for the better at least for a few months once the $ 1.1 billion of the sovereign bond maturity is paid on Tuesday.
No.820, Mount Cresent,Malabe,Sri Lanka