Thursday, March 25, 2021

EconomyNext — Sri Lanka fails to sell 74-pct of Treasury bills at auction amid BOP deficits

Central bank monetizing the debt. More worries about "MMT." 
The rupee is now at over 200 to the US dollar from around 182 at the beginning of 2020.

The implication is that this policy is negatively affecting the exchange rate, importing inflation. But it is difficult to established causality in exchange rate behavior with respect to specific factors.  There are many factors involved.

EconomyNext (Sri Lanka)

1 comment:

Andrew Anderson said...

If they wish to increase demand for their fiat, then Sri Lanka should allow everyone to use it in account form and abolish all other government privileges for private bank deposits.